Select Committee on Culture, Media and Sport Memoranda


Memorandum submitted by the British Beer and Pub Association (BBPA)

  Please find the attached submission from the British Beer and Pub Association to the Committee's inquiry. We very much welcome this opportunity to highlight the views of the public house industry.

  In preparing the submission, we have paid regard to the published terms of reference. You will notice, however, that our paper does not specifically respond to all the issues identified. We have, instead, concentrated on those areas where we have direct expertise, namely the impact of the proposals on the industry and the social impact of the changes proposed and the safeguarding of the young and otherwise vulnerable.

  We hope that the evidence is of value to the Committee and, of course, are very happy to provide any further information that might be required.




  There are 60,000 pubs in the UK with an annual turnover of £18.4 billion.

  The industry employs 650,000 people.

  There are 77,000 fruit machines in pubs.

  Pubs are the third largest contributor of gambling revenue to the Treasury.


  Seventy per cent of new UK machines are manufactured for pubs.

  Machines contribute in the region of 20 per cent of an average pub's profit.

  Pubs are well controlled, essentially adult environments, covered by licensing laws.

  Of the 0.6-0.8 per cent of the UK adult population that are problem gamblers, approximately 2.5 per cent relate to fruit machines in pubs (Gambling Prevalence Study—2000).


  There is an "anti-competitive tilt" with an unjustified, disproportionate and over cautious approach having been proposed for pubs, which would leave them competitively disadvantaged

Machine Numbers

  It is proposed that pubs be allowed two x £25 prize machines with Local Authority discretion to allow more in appropriate cases this is compared with three x £250 machines for clubs, four x £500 plus numerous £25 prize machines for bingo halls the pub industry proposes four machines be allowed as a right with more on application this proposal would reduce needless red-tape and additional costs whilst maintaining controls and not leading to a problematic proliferation of machines.

Protecting the Young and Vulnerable

  It is proposed that "effectively controlled and clearly identified areas" be introduced into pubs and clubs this requires greater definition between DCMS and the industry the industry believes the best results can be achieved through good management and appropriate signage.

Machine Stakes and Prizes

  Pubs welcome the increase to £25 maximum prize from January 2002 the longer term industry aim of higher prizes is modest in comparison to other sectors, supported by the public, unlikely to increase problem gambling to any degree and extremely important for the future of the industry.

  We believe that time should be taken to fully consider the consequences of the proposed new legislation and plan implementation accordingly. We are grateful to DCMS for providing an opportunity for dialogue through its industry steering group.


  The British Beer and Pub Association (BBPA) is the trade association representing nearly two thirds of the 60,000 pubs in the UK. The pub industry has an annual turnover of £18.4 billion, and employs in the region of 650,000 people. There are 77,000 fruit machines in pubs, making it the third largest contributor of all gambling revenue to the Treasury. The vast majority of UK pubs are small businesses, many of which rely on machine income for their business viability.

  The Association welcomes many of the proposals contained in "A Safe Bet for Success—Modernising Britain's Gambling Laws" ("A Safe Bet"), particularly the establishment of a single regulatory authority in the Gambling Commission. However, the pub industry has some fundamental concerns that need further consideration in order to avoid a harmful impact on this important sector of industry. We look forward to working with DCMS to resolve these concerns, which are discussed in detail below.


  Pubs are well controlled, essentially adult environments, covered by licensing laws. Pubs account for around 70 per cent of new machine manufacture in the UK. Therefore, much of machine industry's manufacture and supply is reliant on pubs. Machines contribute in the region of 20 per cent of an average pub's profit.

  Fruit machines are important to pubs, but pubs are equally as important to the machine industry. This must be borne in mind when considering "A Safe Bet", as the main reform proposals relate primarily to machine issues, even though we did not understand this to be the initial imperative for reform. Any new Act should retain flexibility in order to avoid becoming prematurely outdated. There has been much focus on resort casinos, but little apparent attention given to the serious consequences for pubs, which are the social centre of many communities in the UK. We are not yet convinced that the possible ramifications of the proposed changes have been sufficiently thought through in terms of the effects on the British leisure retailing landscape, particularly with regard to the consequences of the proposed changes to the competitive position of pubs.

  We welcome the aims of "A Safe Bet" which states "regulation should be confined to what is necessary to keep crime out, protect the vulnerable, and ensure that gambling products are fair to the consumer". The pub sector has a good record in relation to being crime free and transparent. A certain degree of liberalisation has been proposed for most other sectors, but not for pubs, where the only identifiable barrier to more freedom is in respect of protecting the vulnerable. The Gambling Prevalence Study indicated that of the 0.6-0.8 per cent of the adult population that are problem gamblers, approximately 2.5 per cent relate to pubs. Therefore, of the total adult population, a very small number of problem gamblers could be attributed to machines in pubs. The pub industry proposals of more competitive prize levels and up to four machines as a right, with more on application, would not lead to a proliferation of machines in pubs, nor we believe to any appreciable impact on the numbers of problem gamblers. The proposals would however reduce bureaucracy and be more consistent with the treatment of other leisure retail sectors.

  An unjustified, disproportionate and over-cautious approach has been taken by "A Safe Bet" in respect of the pub sector, which leaves us competitively disadvantaged.

Key Concerns for the Pub Sector

  The table below summarises the position with regard to the recommendations contained in the Budd Report and A Safe Bet, and highlights some of the inconsistencies and subsequent competitive concerns that arise for the pub sector.

Budd Proposals A Safe Bet
Local authorities ability to impose blanket
bans on gambling activities


Introduction of a Gambling Commission


Advertising restrictions lifted


Public Houses

£25 prize machines only
Inflation-only reviews of stakes & prizes

"Grandfather rights" to retain existing machine numbers

New premises allowed up to 2 machines maximum

No betting or gaming

Up to £1,000 prize bingo

Periodic Reviews of stakes & prizes takings into account 'other' factors

No grandfather rights—pubs to have to re-apply to retain their existing machine numbers

2 x £25 Category C machines as of right, with more on application

Machines to be sited in "effectively controlled and clearly identified areas"

£1,000 bingo accepted "in principle"

Betting and other forms of gambling in pubs to be kept under review

Private Members Clubs

Removal of 3 x £250 jackpot machines and
replaced with 2 x £25 machines

Retain up to 3 x £250 jackpot machines

Machines to be sited in "effectively controlled and clearly identified areas"

Cafes & Take-Aways
Removal of all machines

Retained £5 max prize/10p max stake machines as accessible to under-18s at Local Authority's discretion

Adult Arcades

£25 cash machines permitted

Allowed 4 x £500 Category B machines, subject to review, plus £25 Category C machines

Licensed Betting Offices

4 x £500 Category B or £25 Category C machines.
No mixed types of machines.

Sale of alcohol prohibited

No mention of fixed odds machines with unlimited jackpots

Allowed to mix £500 Category B machines and £25 Category C machines to the maximum limit of 4 machines

Introduced limit of £500 prize for fixed odds machines and included them in the total of 4

Sale of hot food but not alcohol permitted


4 x £500 machines and additional £25 machines

No membership requirements

More freedom on bingo games

Endorsed Budd's proposals


Unlimited stakes & prizes

8 unlimited stake and prize, linked machines per gaming table

End of 24 hour membership rule

Alcohol on the gambling floor

Able to offer liquor, food, entertainment, betting, bingo

Endorsed Budd's proposals

  We have identified the following key issues arising for the pub sector:

Machine Numbers

  We welcome the progress made in A Safe Bet with regard to allowing pubs to have a number of £25 machines as of right, with more on application, but believe that this number should be four rather than two. This would avoid unnecessary bureaucracy with costly applications to local authorities. Furthermore, comparisons with all other sectors as outlined in the above table, clearly show the unfavourable treatment of pubs despite no evidence that numbers of machines in UK pubs present a particular problem. We are not seeking a proliferation in the numbers of machines permitted in pubs, which are totally different in respect of machines compared to jurisdictions such as Australia, where a large number of jackpot machines have become a problem. We believe that any proliferation of machines that might arise is a much greater issue in respect of the proposals for other sectors. The Association is aware of the potential dangers in this regard and our paper of December 2001 to the DCMS on machine numbers provided evidence that four machines would be an appropriate number.

  A critical point in A Safe Bet will be the detail surrounding local authorities' "discretion to allow more inappropriate cases". In order to ensure consistency and fairness, we believe there must be a national formula to avoid unreasonable withholding of permission to site additional machines. We have proposed that this is a matter for discussion with DCMS and seek to resolve this as soon as possible.

  We are disappointed that A Safe Bet has not retained the Budd proposal that pubs be allowed to retain their current numbers of machines. This will mean that 11,000 pubs will have to re-apply to local authorities simply to maintain the status quo. Again, there is no evidence that current machine numbers, which have been individually approved by magistrates, have caused any problems that should lead to their removal. We believe that a removal of existing rights may have implications under the Human Rights Act.

Control of access by under 18s

  The pub industry has always supported legislation preventing under 18s from playing gaming machines. Indeed, the industry introduced a voluntary code of practice shortly after the introduction of all cash machines in 1996. Since that time, there has been no evidence of specific problems concerning the playing of machines by under-18s. According to a MORI poll in October 2001, 92 per cent of adults surveyed believed that it was already a legal requirement, demonstrating the effectiveness of the voluntary code.

  A Safe Bet introduced the concept of "effectively controlled and clearly identified areas" for machines. This is potentially a matter of great concern to pubs, as it is not clear how such areas might be created and the industry would be strongly opposed to the introduction of physical barriers such as walls, ropes, lines or screens. There is no doubt that such disproportionate measures would change the nature and atmosphere of pubs. It is more logical and useful to take a responsible management approach, coupled with the use of appropriate signage, to control access. This approach would avoid unnecessary bureaucracy and needless cost to pubs. Should pubs be required to introduce physical barriers this would encourage machines to be sited in peripheral areas to the detriment of both control and income.

  Gamcare have indicated support to the BBPA in respect of our proposals on controlled areas, and agree that the management/signage route is a much better approach. The existence of a law prohibiting under age play, together with appropriate sanctions, should provide sufficient deterrent without unnecessary red-tape.

  We are hoping to work closely with DCMS to thrash out the detail in this area that is so vital to pubs.

  We welcome the clarity that A Safe Bet provides in terms of age related access to gambling. However, we are disappointed that the National Lottery remains an anomaly in this important area of social responsibility.

Machine Stakes and Prizes

  The Association is pleased that A Safe Bet has recognised the value of regular reviews of stakes and prizes, taking all matters into consideration, rather than endorsing the restrictive inflation-only approach advocated by Budd.

  The £25 prize requested by the industry at the last Triennial Review, and which was subsequently recommended by the Gaming Board, was based on a longer term approach. This vision, supported by MORI market research, advocated a £50 prize in 2004 based on survey results showing strong public support for a prize level of £78.

  Historically, there has been concern expressed over the level of maximum prizes of machines in pubs from a "problem gambling" perspective. The experience of a move in the last ten years from £4.80 tokens to £25 cash is that such fears have proved unfounded with pubs having a very low level of problem gambling prevalence.

  The Association will continue to seek higher, more comparable and fair levels of prizes compared to other controlled leisure retailing sectors.

The Gambling Industry Charitable Trust (GICT)

  The pub industry supported the establishment of the GICT, and is represented on the Board of Trustees.

Competition Issues

  It is the view of the BBPA that the proposals contained in A Safe Bet on gaming machines will disadvantage pubs, which will suffer an unjustified, anti-competitive tilt in comparison with other leisure sectors. There is no supporting evidence of the need for such a restrictive approach to pubs.

  Whilst the term "ambient gambling" as coined by Budd, does not appear in "A Safe Bet", its essence remains, with artificial lines of demarcation being retained between sectors which in reality are becoming increasingly similar. For example, a casino or a bingo hall can offer a late night drink in the same way as some pubs. Pubs, the vast majority of which are small businesses, may not want to compete with table gaming or bingo, but will be competitively disadvantaged in respect of machines. It is anticipated that a significant number of bingo halls in the UK will convert into casinos, primarily to take advantage of the new machine legislation.

  There does not appear to be any logic or consistency of approach when a pub admitting only over 18s or even over 21s, can only provide Category C £25 machines, whilst a club or bingo hall, which may allow access to under-18s, can provide Category B machines. In the case of bingo, A Safe Bet also proposes to remove membership requirements, with the general public having open access. This creates a greater similarity between pubs and bingo halls whilst the proposals relating to machines create a greater gulf.


  The Association requests the support of the Select Committee in urging the DCMS to actively seek to resolve the issues of concern to the pub sector.

  Specifically, we have identified the need for further detailed discussions on the following:

  Machine numbers—We would welcome discussions with DCMS to identify the grounds for permitting or refusing "more on application" with a view to ensuring that the needs of pubs are met through a fair, transparent and consistent approach being taken at local level;

  Controlled and clearly identified areas—the Association wishes to work with the DCMS to agree a management approach on underage play;

  Stakes and prizes—We wish to pursue our longer-term aim of higher prizes for machines in pubs, and appreciate the opportunity to do so through the retention of the Review process.

  Permitted activities—The Association welcomes the proposal to allow bingo with up to a £1,000 prize per week in pubs and would very much wish to discuss this in more detail with DCMS. We recognise the importance of keeping other forms of gambling in pubs under review in the light of the significant change that the Review may bring about.

  Whilst we understand other leisure retailing sector's desires to implement changes as soon as possible, particularly in respect of machines, we believe that the Government should take time to fully consider the consequences of the proposed new legislation and plan implementation accordingly. It is clear for example that Payment Method Deregulation is a practical and well supported measure across all sectors which can and should proceed without further delay. However, we recognise that most other proposed changes, not least the inter-relationships with Liquor Licensing Reform, need to be fully evaluated and we are very grateful to DCMS for providing an opportunity for dialogue through it's establishment of an industry steering group.

3 May 2002

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