Select Committee on Regulatory Reform Thirteenth Report

3 Background

6. The Government's policy objective in proposing this draft order is to change the way in which money can be paid into and out of certain categories of gaming machine, namely jackpot machines and higher-value amusement-with-prizes (AWP) machines. The Department states that this reform would allow "more flexibility for customers and operators."[3] It also proposes to increase the monetary amounts which may be inserted into such gaming machines at any one time, and to relax two present restrictions on the operation of such machines: one which requires a jackpot machine to pay out winnings immediately, and one which in effect requires all gaming machines to accept payment for a single play.

7. The Government proposes to make more wide-ranging reforms to the law on gambling by means of a Gambling Bill, which would replace the 1968 Act. This follows the independent review of gambling law carried out by Sir Alan Budd, the results of which were published in March 2002.[4] The Department intends the Bill to provide a major restructuring of the present systems of licensing, control and classification of gaming machines. The proposed new categories of gaming machine to be established by means of the Bill are set out in paragraphs 43 to 47 of the explanatory statement. In respect of the present proposal, the Department expects that the Bill will replicate the effect of the proposed reform of gaming machine payment methods.

The existing legislation

8. Part III of the 1968 Act permits only three types of gaming machine which can accept money for play and pay out prizes. It also sets maximum stakes and prizes for each type of machine: the Secretary of State may vary these maxima by regulations. The three types of machine are set out below.

9. Jackpot machines are found in licensed casinos, bingo clubs and registered clubs. The maximum stake a player can insert for a single play is presently 50p.[5] The maximum prize which a jackpot machine may pay out is determined according to its location: £2000 in a casino, £1000 in a bingo club, and £250 in a registered club.[6] The industry estimates that there are at present 26,200 jackpot machines in operation in clubs and casinos in Great Britain, and a further 200 in operation in licensed bingo halls.

10. Higher-value amusement-with-prizes (AWP) machines are also found in some clubs and casinos as well as in bingo halls, and may additionally be found in adult-only environments, such as pubs, betting shops and areas of amusement arcades which are restricted to over-18s. They are sometimes known as "all-cash" AWP machines, as they are presently required to pay out winnings in cash rather than tokens. The maximum stake a player can insert for a single play is 30p.[7] The maximum prize which a higher-value AWP machine may pay out is £25.[8]

11. The industry estimates that there are 166,300 higher-value AWP machines in operation in Great Britain. This total is broken down by location as follows:
Category of site Total number of machines per category* Estimated number of

machines per site

Liquor licensed premises74,700 1.3
Licensed betting offices14,600 1.8
Inland centres23,700 29.5
Seaside arcades17,300 18.0
Licensed bingo clubs27,300 41.1
Clubs and casinos0* 1.3
Motorway services1,300 15.0
Other outlets7,400n/a

* Figures have been rounded to the nearest 100
Source: Regulatory Impact Assessment (explanatory statement, annex B)

12. Lower-value amusement-with-prizes (AWP) machines are found in family arcades, cafes and leisure centres with a local authority permit. The maximum stake a player can insert for a single play is 30p.[9] The maximum prize which a lower-value AWP may pay out is presently £5 in cash or £8 in tokens.[10] The Department has indicated that the proposed regulatory reform order is not intended to affect lower-value AWP machines.

Extent of the proposal's application

13. The 1968 Act, which the Government seeks to amend by means of the proposal, extends to England, Wales and Scotland. The regulation of gaming in Wales and Scotland is a matter reserved to the Secretary of State. The proposal would therefore have effect across the whole of Great Britain.

3   Explanatory statement, para 2 Back

4   A Safe Bet for Success: modernising Britain=s gambling laws, Department for Culture, Media and Sport, March 2002 Back

5   Section 31(3) of the 1968 Act  Back

6   Regulations made by the Secretary of State under section 31(5) of the Act Back

7   Section 34(2) of the 1968 Act  Back

8   Sections 34(5C) and (5D) of the Act, as amended by order made by the Secretary of State  Back

9   Section 34(2) of the 1968 Act  Back

10   Section 34(3) of the 1968 Act  Back

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