Implementing the transparency agenda

Further supplementary evidence submitted by the

National Casino Industry Forum (GA 107)

As your deliberations close and you turn to preparing your report, may we bring to your member's attention and just emphasise four key points that we believe are terribly important to the future of the UK on-shore casino industry and in particular to the growth agenda.

We were attracted to simply referring to your own statement in 2005, when considering the economic impact of the then Bill when you said the proposed law:

'... will halt the investment plans of many UK and overseas companies in their tracks. It will undermine the economic plans of many local authorities. It will have a significant economic impact and it will undoubtedly lead to loss of money, investment and jobs.'

What the UK on-shore casino industry is saying in evidence to your committee agrees that you were correct, that is indeed the outcome and we go further and directly to what ministers have recently stated:

'The UK Government is not tasked with creating growth, but is tasked with creating the conditions for growth'.

The UK casino industry wants to contribute, is ready to do so and needs only minimal support from government to allow it to generate jobs, investment and revenue and to work with local authorities to deliver growth.

At the outset, the industry is acutely aware that the 'elephant in the room' is responsible gambling. However, if that were, based on empirical evidence, an insurmountable obstacle to change, ministers would not, in the last 12 months have approved other changes to gambling legislation that have allowed thousands more gaming machines at higher stakes and prizes onto the high street. You heard evidence from former ministers that casinos are the safest places in which to gamble.

Responsible gambling is what on-shore casinos offer.

Please help us ensure that the unnecessary obstacles in the 2005 Gambling Act are removed (NO changes to primary legislation required) and we are permitted to contribute to Britain's economic recovery by providing real jobs for real people.

Gaming Machines

Though, there is overwhelming international evidence that increased gaming machine numbers in controlled and regulated conditions have no impact whatsoever on problem gambling (we are commissioning an academic peer review of the existing research to help provide even greater comfort to the government) and as Tessa Jowell and Richard Caborn said in their evidence to your committee, casinos are the 'safest place in which to gamble', less than 1% of all the slot machines in the UK are to be found in casinos. That percentage is diminishing daily as more and more machines are installed in LBOs and in bingo and arcade premises and the on-line offers become increasingly accessible and sophisticated. Thousands more products have emerged since we presented our evidence.

The casino industry deserves the opportunity to offer modern, competitive products in the safest environments and where they contribute to the exchequer.

As far back as 1996 the Home Office was recommending (in their consultation document - appended para 5.5.5) [1] that casinos be entitled to 2 machines per table. We have asked for a ratio of 5 machines to one table in line with the large casino format. We suggest a process that allows 1968 Act casinos that qualify as either Large or Small casinos in terms of space and facilities offered should have the same benefits as those licensed under the 2005 Act. There are also features available on gaming machines - like linked jackpots - that are actually on the face of the 2005 Act that government could implement to help the industry to safely compete which are unimplemented.

We believe that harmonisation of the 1968 Act and 2005 Act proposals is now imperative. We hope you will recommend the government define and immediately begin a harmonisation process.

Harmonisation of the Industry

When we presented to the committee just four of the eight Large licences had been granted. The updated figure is now five licences issued. The process to grant a licence in a sixth area (Leeds) has just commenced and is scheduled to run well into 2013. However, only one Large premises is in operation (Aspers at the Westfield Shopping centre in Stratford) and on current assessments, we do not anticipate any more than one of the granted licences becoming operational in the next 12 months. Full build out of the issued Large licences is not expected until at least 2015. None of the Small licences have been granted and they continue to look commercially unattractive.

There is no 'end game'. Local authorities cannot be compelled to offer the licences. Businesses cannot be compelled to bid and operate them in unfavourable locations and un-commercial terms. Consequently, any 'wait and see' policy that holds the existing industry in stasis until 'all the 2005 Act licences are developed' is no more than political prevarication and action needs to be taken now to prevent market failure and to secure growth based on the 1968 Act estate.

Portability of Licences

We have won support for our portability proposals from some local authorities who would welcome a casino licence being transferred to their area. Others have indicated that they wish to have the power to decide, even if, for now, their decision would be not to have casino gaming. The issue is about localism and freedom of choice. Though the number of casino licences cannot grow - in fact it has reduced by one surrendered licence - portability would encourage more and better development of the existing estate.

We have revisited the 1996 Home Office consultation paper which recommended the creation of a further 13 Permitted Areas. Clearly now that Permitted Areas no longer exist, creating new ones is not an option. However, we have appended the original report to this submission [2] because it clearly demonstrates that more than 16 years ago, the government believed the time was right to change over-restrictive controls on casino locations. In 1997 the only substantive concerns the then Gaming Board had around the recommendations on both more Permitted Areas and increased machine numbers were resource issues. The Gaming Board also reported that:

'The Board does not believe that it should oppose the proposals in the consultation paper (slots and more permitted areas) on the grounds of their impact on the small minority of the population who suffer or potentially may suffer, problems with the gambling activities...'

Unfortunately, those recommendations were in effect put on ice whilst Budd reported. In 2001 Budd recommended even greater freedom! Since then nothing has happened.

We urge you to recommend that the government revisit these regulations which are an anachronistic inhibitor to growth and the cause of market failure.

Modernisation of Product

There are two aspects to modernisation.

· The first is to allow casinos to offer digital representation of gambling paraphernalia, like and dice etc.

· The second is to allow casinos to offer on-line products.

Whilst, we accept that the second would provide casinos with more 'gaming devices' and thus might require additional legislation to control the number of on-line devices a casino could offer, the former simply seeks to address the technological changes that have occurred since the Act was first drafted. We live in a digital age - except in a casino where cards must be made of card!

The existing legislation helps on-line casinos draw revenue from the UK exchequer into less controlled environments and undermines British jobs.

Apart from the inherent dreariness of the legislation which prevents casinos in the UK from offering what can be found everywhere else in the world - and the impact on UK plc as a tourist attraction - the modernisation of products would allow the industry to invest in modern equipment that would be capable of providing more and better data on machine usage, a facility the Gambling Commission and the Responsible Gambling Trust would welcome.

Responsible Gambling

Sadly, it is impossible to have any discussion about casinos without constantly referring to responsible gambling. Let us remind the committee that the gambling industry has done everything that Budd asked of it and more and that Budd asked what he did as one side of an equation that saw really substantial deregulation. We have not enjoyed deregulation on a scale even approaching that which saw the current safety measures as necessary. The propensity of the British public to gamble is one of the highest in the world while problem gambling in the UK remains at one of the lowest. That must indicate that the industry has identified the need for proper consumer protection measures and is doing the right things!

May 2012

[1] Not printed.

[2] Not printed.

Prepared 14th June 2012