Supplementary memorandum from the British
Amusement Catering Trades Association (BACTA) (DGB 134)
In addition to BACTA's written evidence dated
10 December 2003 ("Evidence") and to the supplementary
observations in respect of documents comprising the Draft Policy
Bill ("the Bill") referring to the following documents
seriatim 1) The Policy, 2) The Bill, 3) Regulatory Impact Assessment,
BACTA now makes the following comments in relation to the Supplementary
Clauses.
Extracts are noted in bold followed as applicable
by BACTA comments, and are made in the order in which they have
been presented rather than in a hierarchy of importance.
We incorporate by reference the Evidence and
express our disquiet that the concerns expressed by us from the
beginning of the consultation process remain largely unaddressed.
We express below our general concerns followed
by specific comments in relation to the Supplementary Clauses.
GENERAL CONCERNS:
1. Fairness and Equity
We believe that opportunities and controls should
be equally applied between the market sectors and not, as is currently
being proposed, only favour the new emerging sectors (large casinos
and remote gambling). Many of the existing traditional machine
market sectors (seaside arcades, inland arcades, pubs, bingo etc)
are facing restrictions relating to machine numbers, stakes and
prizes, whilst new sectors (casinos and remote) will be able to
offer a multiplicity of gaming products with virtually unlimited
stakes and prizes.
It should be remembered that whatever the new
entrants may generate in terms of economic benefits and jobs,
the existing machine marketplace employs in excess of 22,000 people
directly and generates circa £400 million per annum in tax
revenue. Businesses range from large multi-national subsidiaries
to third or fourth generation family businesses who provide pleasure
and entertainment to millions and form an important part of the
UK's social infrastructure.
2. Social and Economic Consequences of the
Bill
(a) Problem Gambling:
The existing gaming industry has evolved successfully
and responsibly over many years and the current measured regime
is key to the relatively low levels of problem gambling experienced
in the UK. The 0.8 per cent quoted in the 2001 prevalence study
is one of the lowest rates in the world.
The Bill imposes insufficient restriction upon
the expansion of the new style casinos producing a very real risk
of over-supply to the market in the short to medium terms. The
recently published Nera Report, based upon research from the USA
and Australia into casino gaming, predicts a figure of 1 million
problem gamblers in the UK as a result of the likely increase
in the number of casinos once the Bill becomes law. Apart from
a multiplicity of gambling and leisure activities all being on
offer under one roof, conservative estimates suggest that an additional
50,000 machines with unlimited stakes and prizes will enter the
market. (This compares with the circa 235,000 limited stake and
prize machines on offer today).
(b) Economic Impacts:
Seaside Resorts:
New style casino resort complexes will be so
vastly superior in terms of size, range of product offering etc
that new and existing visitors will naturally gravitate towards
these `emporiums', slowly destroying much of the existing seaside
economy. Resort and large casinos will be adult gambling environments
providing scant impetus for social and tourism led regeneration.
Town/city centres:
Casino operators will site the new casinos on
the edge of prosperous towns rather than the areas needing urban
regeneration. These large casinos sited on the outskirts of towns
and cities have the ability to transform the night-time economy
of local town centres. Large casinos offering food, drink, entertainment
and several forms of gambling under one roof (betting, bingo,
gaming table and machines) could herald the demise of city centre
businesses including adult gaming centres, clubs, pubs, restaurants
and bingo halls, in exactly the same way that large out of town
supermarkets have damaged the vibrancy of town centres for retailing.
Remedy: Follow a cautious approach and
allow the phased introduction of a limited number of new style
resort and large casinos within a controlled number of designated
areas where a clear economic and social benefit is deemed likely.
This compromise would allow this exciting new product to be market
tested in the UK without risking the potentially disastrous social
and economic consequences illustrated above.
3. Grandfather Rights
The Bill does not include measures to protect
existing industry. In most cases the future of these businesses
(whether they be seaside amusements, adult gaming centres or machines
being operated in public houses) could be left to the discretion
of Local Authorities which may unilaterally decide not to grant
permits to businesses that may have been operating for generations
and there is no right of appeal. This would be totally unacceptable
to BACTA and we seek confirmation that the final draft will incorporate
these matters.
Remedy: Grant "grandfather rights"
to existing businesses in perpetuity, providing they operate within
all relevant legislation and codes of conduct.
4. Single Sites (fish and chip shops, cafes,
taxi offices, etc)
Although not included in the draft Bill, the
Gaming Board of Great Britain continues to comment that it "remains
uncomfortable about children having casual access to gambling
in miscellaneous premises", ie single sites. The Board has
regulatory concerns in that the number and variety of such sites
makes enforcement difficult and continues to seek a complete ban
in such premises.
The Government has already rejected this proposal
once within its White Paper "A Safe Bet for Success".
Certificated suppliers of gaming and amusement machines have recently
seen their businesses seriously eroded by the "deal"
on FOBM's struck between the Gaming Board and the Bookmakers and
any further restrictions could prove terminal. There are many
regions in which Local Authorities, Customs and Excise and indeed
Gaming Board inspectors do not appear to experience any significant
enforcement difficulties, and we believe the Government should
continue to oppose changes requested simply on the basis of insufficient
management resources.
Remedy: Ensure that within the proposed
legislation "single sites" can be supplied only with
Category D amusement machines and that such machines can only
be supplied by Section 27 licence holders.
5. Traditional seaside businesses
FEC's/Category D machines. The Bill allows a
discretion to introduce an age restriction for Category D machines
by means of secondary legislation*. Such a move would appear likely
to "wipe-out" the seaside entertainments industry. There
are no grounds for this measure as our research (ORB) has shown.
This potential change will make future investment in the industry
an unrealistic prospect. This position is totally unacceptable
to BACTA as it will significantly affect many members who have
for many years provided much needed investment into the coastal
resorts.
*The draft currently contains wide discretion
for the introduction of many restrictions which would fundamentally
undermine the industry and appear not to be the subject of consultation.
Remedy: Remove the enabling clause, allowing
an age restriction for Category D machines only through Primary
Legislation with full consultation, should evidence from research
prove that change is required.
6. Stakes and Prizes
The Bill reduces stakes and prizes for Section
34 machines from 30 pence stake/ £8 prize to 10 pence stake/
£5 prize with the exception of cranes (and predominantly
skill ticket redemption machines), which will be allowed to retain
the 30 pence stake. In the case of the latter machines paying
out only non-monetary prizes BACTA believes that it is illogical
to allow the stake to remain at the same level (30p) but reduce
the prize from £8 to £5. This will erode established
customer value. BACTA believes that there is a good case for operating
non-monetary prize machines on a marginally higher stake and prize
tier. The ORB survey shows strong customer support for the existing
Family Entertainment product.
Remedy: Allow Category D machines paying
out non-replayable, non-monetary prizes to operate on 30 pence
stake/£8 prize.
"Trading Up". The practice of saving
individual prizes won from, for example, a crane machine and trading
them in/exchanging them for a larger prize is known as "trading
up". A test case in the 1990's established it as a legitimate
practise. The DCMS and the Gaming Board have consistently stated
that this issue will not be revisited, but, on page 36 of the
Policy document, paragraph 4.54, crane machines on 30 pence appear
to be prohibited from paying out exchangeable prizes.
Remedy: Amend policy to allow machines
in this category to pay out non-money and non-replayable prizes
and prizes that may be exchangeable (but not for money).
7. Pub Machine Numbers
The Bill leaves the pub sector very vulnerable.
BACTA and many other trade associations believe that Pubs should
be allowed a minimum of 4 machines by right so that they are protected
against the uncertain approach of some Local Authority decisions
(as contemplated by "A Safe Bet for Success") but also
so that they can keep pace with development in the market. This
would also avoid the post bill administrative nightmare of some
11,000 pubs currently with 2 to 4 machines having to apply for
special permits. At the present time there are no agreed guidelines
for the siting of machines. There is no evidence of problems currently
existing, and it would therefore be inequitable and unnecessary
for pub customers to be disadvantaged by either a change in the
way in which machines are sited, or a restriction on machine numbers
in Pubs.
The illogicality of just 2 Category "C"
machines by right in pubs is further demonstrated by the fact
that other premises where alcohol is served and children can be
present, like clubs, are to be allowed 3 Category "B"
jackpot machines.
Remedy: Grant pubs a minimum of 4 machines
by right, and agree sensible guidelines for machine siting in
line with current practices.
8. Fixed Odds Betting Machines
Fixed Odds Betting Machines (FOBM's). In a recent
agreement between the Bookmakers, the DCMS and the Gaming Board
betting shops have been given the right to operate up to 4 machines
per shop with stakes of up to £100 and prizes of up £500.
In "A Safe Bet for Success" the DCMS established the
principle that AGC's and Bookmakers should be entitled to operate
the same tier of machine types, either Category B or C. The recent
agreement with FOBM's goes completely against this principle,
and hugely disadvantages AGC's and Bingo Halls.
This agreement gives Bookmakers a massive immediate
and ongoing advantage over the other providers of machine gambling
on the high street, notably AGC's and Bingo Halls. BACTA members
have for the past 18 months adhered to the Gaming Board's repeated
request not to aid the proliferation of FOBM's whilst the Gaming
Board pursued its court case to establish the definition of FOBM's
as gaming machines. Whilst the Gaming Board still state that they
believe FOBM's to be gaming machines they have decided to suspend
their case and clarify the position via the new Gambling Act.
The net effect of this is that the number of FOBM's on the high
street could well double to over 20,000 before the new Bill becomes
law.
Adult Gaming Centres and Bingo Halls sited within
close proximity of bookmakers have seen their machines turnover
decline substantially since the introduction of these machines.
Proliferation at the scale now envisaged could well prove terminal
for many businesses.
Remedy: We understand that the position
following the Bill will be that FOBM's will be defined in the
new Act as Category "B"+ and AGC's, Bingo Halls and
Bookmakers will have the same entitlement to machine numbers,
stakes and prizes. This will achieve the principle of product
parity between these outlets applied within the Government's White
paper.
9. Licensing Requirements/Costs
To date we do not know precisely the combination
of licences that will be required in any given outlet (personal,
operating, premises etc), but are deeply concerned that the potential
requirement for excessive categories of personal licenses will
be operationally invidious. Further, the Gaming Board has efficiently
administered the current regulatory regime minimising costs and
we fear that the proposed changes via the Gambling Commission
and Local Authority licenses will represent an inordinate, unwarranted,
and costly bureaucracy.
Remedy: To identify licensing requirements
and costs without delay so that businesses can plan accordingly
and ensure that costs are properly attributed to those industry
sectors benefiting from the new regime.
10. Powers of the Gambling Commission and
Local Authorities
We are seeking to ensure that the present well-structured
and clear operational environment is retained to protect the current
industry and encourage forward investment. The safeguards identified
in "A Safe Bet for Success" (including guidance and
advice which Local Authorities should be obliged to follow) are
enshrined in the new regulatory scheme and we would like to see
as much as possible included in the Act to prevent arbitrary or
inconsistent applications of the legislation. Where there is such
a lack of detail or objective criteria, then those who fall within
the legislation will be uncertain when their action might lead
to criminal liability, infringing the HRA and the ECOHR.
Remedy: To define powers very precisely,
including via the Gambling Commission, the statutory guidelines
and role of the Local Authorities.
11. Machine Testing
BACTA fully supports the need for new standards
of testing and protocols to be devised for Category "A"
machines. The draft Bill appears to offer the possibility that
the existing successful testing regime agreed with the Gaming
Board for Category B/C/D machines could also be subject to change,
contrary to previous assurances by The Gaming Board and DCMS.
This would be undesirable as the additional unnecessary bureaucracy
could impede investment in and speed of product innovation and
development.
DETAILED COMMENTS IN RELATION TO THE SUPPLEMENTARY
CLAUSES
Pg 12
Miscellaneous Offences
30 CHEATING
(1) A person commits an offence if he-
(a) cheats at gambling, or
(b) does anything for the purpose of enabling
or assisting another person to cheat at gambling.
Comment: We submit that the clause must be clearer
on its face that it includes attempting to cheat ie incorporating
(3)
Pg 13
32 PROVISION OF
UNLAWFUL FACILITIES
ABROAD
(1) A person commits an offence if he does anything in Great
Britain, or uses remote gambling equipment situated in Great Britain.
Comment: We submit that this is too loose should
include direct/indirect use and "use" should be defined.
33 GIVING FALSE
INFORMATION
(1) A person commits an offence if without reasonable excuse
he gives to the Commission or a licensing authority for a purpose
connected with a provision of this Act (whether or not in relation
to an application under this Act) information which is-
Comment: We submit that this should be limited to
knowingly giving information when he is aware it is false or misleading.
Pg 14
Part 4
Protection of Children and Young Persons
36 INVITATION TO
GAMBLE
(2) But subsection (1) does not apply to-
(e) the use of a Category D gaming machine.
Comment: Amusement should replace the word gaming.
Section 46
Comment: Please clarify that the fast track
procedure to gain a club premises certificate will apply to AGC's.
Pg 141
Schedule 9
Club gaming permits and club machine permits
Application
Pg 142
4 A person who receives a copy of an application
for a permit in accordance with paragraph 3 may object to the
application within the prescribed period of time and in the prescribed
manner.
Comment: Please clarify what person is referred
to here? Is it a person within 3 (1) ?
6 (1) A licensing authority may refuse an application
for a permit
(b) that the premises on which the applicant
conducts its activities are used mainly or wholly or mainly by
children..
Comment: Please define wholly or mainly.
(c) that an offence, or a [ 1 ] breach of a condition
or a permit [ 2 ] has been committed in the course of gaming activities
carried on by the applicant, [ 3 ]
Comment: Insert the words in the square brackets
as follows:
2. which has not been remedied
3. in the previous 5 years.
Please clarify how this applies when section
8 (2) prohibits attaching conditions to a permit by a local authority.
Who can attach a condition and of what type?
(d) that an objection to the application has
been made under paragraph 4.
Comment: on what grounds can this be used. The
fact of an objection cannot be the soleground.
7. (1) Before refusing an application for a
permit a licensing authority must hold a hearing to consider the
application and any objection made under paragraph 4.
Comment: Provision to be made for the applicant
to attend and reasons for decision to be given.
Pg 143
10. (3) The authority to whom an application
to which this paragraph applies is made shall grant it unless
they think
Comment: Delete the words "they think"
as this is too subjective.
(c) that a club gaming permit or club machine
permit issued to the applicant has been cancelled during the period
of ten years ending with the date of the application.
Comment: This should depend upon the reason
for the cancellation
Pg 145
Cancellation and forfeiture
20. (1) The licensing authority which issued
a permit may cancel it
Comment: The words "the authority" and
"think" are too subjective and should be deleted, see
previous comments
(2) Before cancelling a permit under this paragraph
a licensing authority shall-
(a) give the holder of the permit at least 21
days' notice of the authority's intention to consider cancelling
the permit
Comment: add the words "and its reasons"
(b) hold a hearing if the holder requests one,
and
Comment: Add the words "holder present".
(3) The cancellation of a permit shall not take
effect until-
Comment: We submit that cancellations should
be suspended pending appeal.
Pg 146
21 (2) But a licensing authority may disapply
sub-paragraph (1) if they think that a failure to pay is attributable
to administrative error.
Comment: Add the words "by the Applicant
or LA."
Appeal
24 (5) An appeal under this paragraph must be
instituted-
(a) in the magistrates' court
Comment: We submit that appeals should be to
the High Court
Pg 148
Exercise of functions by licensing authority:
general
26. In exercising a function under this Schedule
a licensing authority shall have regard to-
Comment: Should be mandatory ie shall have regard
to should be replaced "shall act consistently with"
etc.
(a) any relevant guidance under section 17, and
Comment: We submit that this should be mandatory
and that "have regard" is not sufficiently strong. Perhaps
the words should read "shall act consistently with"
or shall follow. We submit that we must see the guidance in the
draft as part of the scrutiny process.
Pg 93
Part 12
224 Members' Club
(3) A club is a member's club for the purposes
of this Act despite subsection (1) (a) it-
(a) it is established or conducted wholly or
mainly for the purpose of the provision of facilities for gaming
or a prescribed kind,
Comment: Please clarify meaning of "prescribed
kind"
Pg 94
Exempt gaming
227 The exemption
Comment: We request grater clarification regarding
section 227 (2) and (3) in particular in definition "or staking
the bank" We are concerned that this should not mean that
all gaming machines should be totally random.
Pg 96
229 Club gaming permit
(4) Those conditions are-
(d) that children and young persons are excluded
from any area of the club's or institute's premises where gaming
is taking place.
Comment: This is more restrictive than paragraph
229 6 (a) that no child or young person use Category B or C gaming
machines on the club's or institutes premises and 97 229 6 (b)
comply with relevant codes of practice. We submit there should
be consistency between these three clauses.
Pg 97
(b) that the holder comply with any relevant
provision of a code of practice under section 16 about he location
an operation of a gaming machine.
Comment: Please clarify the requirements of
section 16 and the codes of practice.Please clarify when such
will be issued.
231 Club machine permit
Comment: Please clarify the rationale for distinguishing
between casinos and clubs regarding the 48 hour rule?
(2) A club machine permit is a permit issued
by a licensing authority authorising up to three gaming machines,...
Comment: What provision will be made for spare
machines that are not in current use?
Pg 98
233 Bingo: turnover limit for exemption or permit
Pg 99
(9) The Secretary of State may by regulations
substitute a new figure for that specified in subsection (2) (a)
or (b) or (3) (a) or (b).
Comment: We submit that any change must be the
subject of consultation
236 Exempt Gaming
(2)
(3)
Comment: Please clarify intention of these clauses?
Pg 100
238 Bingo
Comment: See previous comments
Pg 101
239 Gaming machines
(2)
Comment: Please note it must be clear that this
clause only applies to an application in respect of machines in
excess of two.
(3)A licensing authority to whom an application
is made under subsection (2) shall consider it having regard to
the licensing objectives and such other matters as they think
relevant and shall
Comment: We submit that this is much too broad.
See previous comments regarding "having regard to".
In addition reasons must be given. What is the meaning of other
matters as they think relevant. We believe that this is too subjective.
(4) The Secretary of State may make regulations
prescribing the procedure to be followed in relation to an application
for the addition of a condition under subsection.
Comment: This must be the subject of full consultation.
(5) Paragraph 9 (1) and (2) of Schedule 5 to
the Licensing Act 2003 (c. 17) appeal to magistrates' court) shall
apply to a decision of a licensing authority under subsection
(3) (b) or (c).
Comment: We seek appeals to the High Court.
Pg 102
Comment: Please clarify the appeals procedure
against removal by the local authority
Pg 240
Comment: We submit that this is not reasonably
consistent with pursuit of the licensing objectives. As currently
drafted the exemption can be removed "only if they think"
the application of the section to the premises is not reasonably
consistent etc. We submit that there must be clear objective criteria
by which clear actions by local authorities can be determined.
In addition there appears to be no appeal procedure in respect
of such actions.
As a general matter we believe that grandfather
rights have not been adequately addressed and further submit that
should the number of gaming machines to be allowed in pubs be
less than four then such number of machines must be the subject
of separate consultation between stake holders, the gambling commission
and the Secretary of State.
Further we seek consistency in relation to the
linking of machines and submit that linking should be permitted
between premises or a justification given for a different treatment
between linking in a single site casino and linking between different
premises.
COMPETITION ASSESSMENT,
THE CASINO
MARKET
We wish to make further detailed submissions
in relation to the underlying assumptions of this paper which
we believe are flawed. We suggest that such further representations
are made in the context of the BACTA—Henley Economic and
Social Impact Study.
SUPPLEMENTARY POLICY
MEMORANDA
17 notes that the provision for inspection of
clubs remains outstanding, but surely clause 247 does exactly
this?
We express concern regarding cross border services
and European Union impact.
February 2004
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