Gambling

Written evidence submitted by the British Association of Leisure Parks, Piers & Attractions (BALPPA) (GA 32)

The British Association of Leisure Parks, Piers & Attractions Ltd (BALPPA) was established in 1936.

It represents the commercial interests of a significant number of UK permanent based visitor attractions and associated businesses. The majority of our membership are based in seaside locations.

Membership of over 300 businesses includes many household names such as Blackpool Pleasure Beach, Alton Towers, Thorpe Park, Drayton Manor Theme Park and Brighton Pier together with manufacturers of Category D gaming machines as well as redemption & crane machines

SUMMARY

1. Since the publication of the Budd Report in 2001 and various report stages thereafter, BALPPA has expressed concerns over the need for change from a Gambling Act that was the envy of the world to an Act that has proven to be ineffective, burdensome and financially damaging to an established industry resulting in lost jobs and livelihoods.

It should be remembered that the Gambling Act 2005 was passed under the ‘wash up’ arrangements prior to the dissolution of the then Parliament. As such the provisions were never fully debated in the House, and never underwent full Parliamentary scrutiny. It is for this reason that we believe the Act to be poorly thought through and to be bad legislation, particularly when compared to the previous Gaming Act 1968 (which had severed well for almost 30 years)

Viewed in the context of its declared objectives we would contend that the Act was in fact unnecessary.2. The core Objectives for the Gambling Act 2005 were:

· To ensure that Gambling is maintained crime-free and conducted in an open and fair manner

Since the Gaming Act 1968 our Gambling Industry had been the envy of the World due to its ability to both conform to the Act and to self-regulate. There was no evidence to suggest that it was not crime-free, open and fair.

· To protect children and vulnerable people from the adverse effects of gambling.

Working with the ‘old’ Gaming Board for Great Britain, the Industry has achieved a high level of protection for both groups and financially supported organisations formed to provide protection and support.

· Update the legislative framework with regard to online gambling.

The 2005 Act, implemented in autumn 2007 has failed to address this issue, and has only succeeded in driving online gambling organisations off-shore and beyond the reach of the Act.

3. The financial impact of the Act on the UK Gambling Industry.

The unintentional consequences of the Act have been to decimate the most financially vulnerable sectors of the Industry; namely seaside operators and the manufacturers supplying the sector. Boarded premises which were formerly thriving family operated businesses are clearly visible in our coastal resorts. Not only have we lost the amusement arcades which provided family entertainment and wet weather facilities, we have lost many of the subsidiary businesses which relied on the visitors for their business, novelty and souvenir shops being obvious examples. The loss of jobs in these vulnerable seaside economies has been particularly damaging.

4. The effectiveness of the Gambling Commission since its establishment, and whether it represents good value for money.

The previous Gaming Board of Great Britain (GBGB) worked effectively; there was no necessity for change. It provided control and supervision of an Industry which respected its function and responded accordingly. In comparison to the GBGB, the Gambling Commission (GC) initially employed three times the number of staff; (we believe this has now fallen to somewhere over double), but ceases to obtain the credibility of its predecessor; and continues to struggle to prove its viability both financially and functionally. In fact with the failure of the predicted increased in internet gaming and casino companies, the workload has only risen marginally with extra involvement in the Arcade sector.How can such an increased number of staff be justified?

Increased regulation and enormous increases in licensing and compliance costs have achieved little other than create more bureaucracy and red tape with which to burden a vulnerable sector. Licensing and compliance costs (for both Operating and Premises) have increased from tens of pounds to many thousands annually.

5. The impact of the proliferation of off-shore online gambling operators on the UK gambling sector and what effect the Act has had on this.

Although the Sector which BALPPA represents is not directly affected by the considerable growth in online gambling it recognises that the Act has only succeeded in driving these organisations off-shore with a consequential loss of employment and tax revenues to the UK.

6. Why the Act has not resulted in any new licenses for casinos or super casinos.

The opportunity to provide regeneration opportunities was widely recognised by the Industry. Unfortunately due to a flawed selection procedure coupled with a lack of clear understanding of the basic regeneration issues for coastal towns, the Government missed an obvious opportunity.

7. The effectiveness of the classification and regulation of gaming machines under the Act.

This has been the most damaging element of the Act on coastal businesses. In the years preceding the introduction of the Act BALPPA held frequent and protracted discussions with officials and Ministers, during which we warned of the commercial damage likely to result from the proposed classification of machines. Unfortunately the proposals were implemented and our concerns realised.

The negative impact of the Act on our sector was apparent within months of its implementation. Figures obtained from a geographical cross section of our Members during that period clearly illustrated the immediate problems.

· Arcade turnover down on average 22.3%

· Over 200 arcades closed in the last two years, many of those were located at the seaside.

· Several seaside funfairs closed including Rhyl, Folkestone, Margate and Southport; with others experiencing serious difficulties.

· Sales of cranes produced by UK manufacturers over a three year period including the first 9 months of 2007 fell by 30%, illustrating the compound effect of the crisis. Since the Act annual production of machines has fallen from 55,000 machines per annum to 10,000. One manufacturer reports 104 jobs lost since 2008.

· The reduced machine population forced on operators resulted in fewer licenses and a loss in revenue to HMRC, GC and Local Authorities.

· Restrictive technical standards imposed on the design of new games by GC have resulted in new equipment being unable to compete with the older ‘legacy’ machines carried over from the previous Act. This has compounded the impact on the manufacturing sector.

The new classification of machines produced a situation, the consequences of which could have been foreseen. Licensed Betting Offices (LBO) were now allowed to operate hardcore gaming machines of an even higher stake and prize limit than that allowed in Casino premises.

New LBOs opened in numerous coastal towns; adult gamers, previously content with the softer, lower stake & prize machines, allowed in adult only areas of Coastal Arcades migrated to the LBOs where they were subject to increased temptation of traditional gambling opportunities in addition to the new machines.

Such was the seriousness of the situation in 2009 Gerry Sutcliffe MP (the Minister responsible for gambling at that time) recognised that urgent action was required in order to assist coastal businesses. In an attempt to redress the balance he agreed to a review of stakes and prizes for Category C and D machines which offered some respite in the spiraling downturn.

CONCLUSION

As is apparent from the responses above BALPPA considers the Gambling Act 2005 to have been an unnecessary and costly piece of legislation, unfit for purpose and the cause of serious downturns to an Industry ill placed to accept such burdens.

We recommend a total review of all elements of the 2005 Act with a view to recovering the enviable position the UK previously occupied in the worldwide gambling industry.

In particular we would strongly recommend immediate changes to give some relief to the seaside and manufacturing sectors, as follows:

· Parity of treatment between adult premises (Adult Gaming Centres & Licensed Bookmakers) in terms of Licensing and machine type.

· A reduction in premises licence fees – set price for premises licence fees across all Councils as per Scotland

· A reduction in Gambling Commission fees and simplification of regulation

· Anomalies in Social Law (Gambling Act) and Fiscal Law (Taxation) be rectified.

· Reinstatement of the three yearly review of stakes & prizes in respect of all machine categories through consultation with GC & DCMS.

BALPPA would welcome the opportunity of providing a verbal submission to assist the Select Committee in its deliberations. We would utilise our considerable experience of the coastal arcade sector and field a spokesman well versed in the issues raised.

June 2011

Prepared 29th July 2011