Supplementary memorandum submitted by
BACTA
Further to the written evidence submitted by
BACTA to the Culture, Media and Sport Committee's inquiry into
tourism on 16 March 2007, and I am sending supplementary evidence
detailing the serious down turn that our industry has experienced
since the implementation of the Gambling Act 2005.
The annex outlines briefly the devastating impact
that the Gambling Act has had on the traditional seaside tourist
economy, including seaside arcades, piers and bingo halls, since
its implementation on 1 September 2007. While we appreciate the
Committee's inquiry is at a relatively advanced stage, we do hope
Committee Members will take into consideration the important issues
we raise, not least given the damage that the Gambling Act is
doing to traditional seaside resorts.
INTRODUCTION
1. BACTA (the British Amusement Catering
Trades Association) is the largest trade association for UK gaming.
It currently represents the interests of over 685 companies and
1,170 individuals, covering the entire supply chain from manufacturing,
through distribution and including retail premises. Our membership
includes family seaside arcades, aduit gaming centres, bingo halls,
pubs, clubs, and machine manufacturers and suppliers.
2. The key points BACTA wishes to draw to
the Committee's attention in our supplementary evidence are:
— The introduction of the Gambling
Act on 1 September 2007 has resuited in serious unintended social
and economic consequences. Since then, the Gambling Act has
— provoked a fundamental shift in customer
b6havlour
— Because the Gambling Act has reduced
gaming machine stakes and overall machine numbers in traditional
softer aduit gaming venues, such as seaside arcades and blngo
halls, customers have migrated to high stake, high prize gaming
machines in bookmakers.
— As a consequence of this, the legislation
is causing business closures and redundancies, damaging local
economies, communities and tourism.
— We are calling on Government to take
Immediate action to rebalance the market in order to avert the
collapse of the traditional seaside amusement sector and an increase
in problem gambling.
IMPACT OF
GAMBLING ACT
3. Britain has long had one of the lowest
rates of problem gambling in the worid. However, this has been
threatened by the implementation of the Gambling Act from 1 September
2007. Traditional softer gaming venues, many of them integral
to seaside tourist resorb, are finding it impossible to compete
for customers as a resuit of the new regulatory regime.
4. Since 1 September 2007 there has been
a significant distortion in the market for aduit gaming caused
by the way in with the Act has changed the relative attractiveness
of the machines that can be offered at different types of venue.
5. This is having a devastating impact on
the economic viabllity of seaside arcades, blngo hak and aduit
gaming centres. It is also having a serious negative impact on
the wider public interest. Unless remedial action is taken by
Government there is a real danger that the legislation could have
the unintended consequence of increasing problem gambling, while
at the same time destroying long standing UK businesses and causing
thousands of redundancies.
CUSTOMER BEHAVIOUR
6. The Gambling Act has reduced to four
the number of slot machines which offer a £500 prize in aside
arcades, bingo clubs and adult gaming centres, as well as haMng
the amount that can be staked on these machines to £1. The
new arrangements are very unpopular with customers. Many are migrating
to Licenced Betting Offices where they are playing Fixed Odds
Betting Terminals (FOBTs) or B2 gaming machines. FOBTs can have
a mwdmum stake of £100 and mwdmum prize of £500.
7. The Act has therefore unintentionally
pushed customers to a form of gambling which the recently published
British Gambling Prevalence Study found had one of the highest
rates of problem gambling at 112%, compared to that for slot machines
of just 26%. Pushing customers to harder forms of gambling is
contrary to the fundamental philosophy behind the legislation—protection
of the vulnerable.
IMPACT OF
ECONOMIC DOWNTURN
8. The shift in the pattern of gambling
is evidenced by the economic downturn being suffered by many companies
operating seaside arcades, adult gaming centres and bingo halls.
9. Survey data collected by BACTA shows
that the traditional gaming machine sector has faced an average
21% reduction in revenues since 1 September 2007, as compared
to the same period last year. That reduction reflects in part
the impact of the smoking ban, but, to a far greater extent, the
changes introduced by the Gambling Act. This has wiped out profits
for this period and threatens the long term viability of these
businesses. Every week brings business closures and redundancies
damaging local economies, communities and tourism.
10. Not only have businesses been affected
by a drop off in trade but their expenses have increased dramatically
with the additional costs of Gambling Commission and local authority
premises licences, together with the capital investment required
to ensure machines comply with the new Gambling Act
11. The downturn has had an impact across
the whole gaming machine sector including machine suppliers and
manufacturers. Many premises are now returning machines to manufacturers
as customers do not like the product. Manufacturers who have already
had a major reduction in their trade over the last three years
due to the uncertainty of the new Gambling Act are now seeing
even more of a downturn with jobs losses and closures resulting.
CONCLUSION
12. The Government has taken early action
once already to address another unintended consequence of the
Gambling Act that would have devastated clubs. The Secretary of
State for Culture, Media and Sport created a new category of gaming
machine, B3A, without any undue delay in order to avoid closures
and job losses.
13. BACTA is seeking from Government the
same degree of urgency to address the severe economic problems
that are being experienced across our industry. In particular,
we are urging Government to:
— Reinstate a £2 stake on B3 gaming
machines (located in adult gaming centres and bingo halls). This
would give customers back the stake they had before the Act and
stop them shifting to harder gaming environments.
— Increase the number of B3 gaming
machines to a maximum of 20% of the total in a venue. This would
especially help large seaside arcades who currently are only allowed
4 machines, which is inadequate to satisfy demand.
14. We hope the Committee is able to take
into consideration the points raised in this supplementary evidence
as it concludes its oral evidence sessions and begins preparing
its final report on tourism.
January 2008
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