Memorandum from the Gala Group (DGB 11)
1. INTRODUCTION
1.1 In response to the invitation to submit
written evidence on the draft Gambling Bill and as Britain's leading
gaming operator, Gala is pleased to outline its views to the Joint
Committee.
1.2 The Gala Group operates in Great Britain
from 166 licensed Bingo Clubs and 27 Licensed Casinos, with a
further two under construction. In addition Gala operates gaming
complexes in Gibraltar and on the Isle of Man. The Group currently
employs circa 10,000 people and has circa 33 million admissions
to its businesses per annum.
1.3 Gala has no higher priority than corporate
social responsibility and community involvement. We are an active
member of "Business in the Community", a qualified member
of the "Investors in People" programme, encourage enormous
volumes of local community support in those areas where we operate,
contribute to the Gaming Industry Charitable Trust, and take a
leading role in the charity efforts of both the Casino and Bingo
trade associations.
1.4 We recognise that any expansion in the
Gambling sector has risks. However, we believe they are controllable
and can be minimised. Gala would intend to take a leading role
in that effort.
1.5 Gala fully supports the philosophy behind
the proposals for new legislation, and contends that:
— Economic Benefit—Research undertaken
by Pion Economics on behalf of the Cross-Industry Group for Gaming
Deregulation concluded that the new Gambling Act will increase
net output by up to £8 billion per anuum, create more than
100,000 new jobs and generate an additional £3 billion per
annum, in tax revenue for the Exchequer. The proposed legislative
framework will allow the UK to become the global centre of responsible,
well regulated gaming, as part of a diverse and consumer orientated
leisure sector.
— Regulatory Risk—It is Gala's
contention that a new Gambling Act is not just a "one way
street" of economic growth for operators, it is also an urgent
necessity in terms of effective regulation and social responsibility.
It is clearly a misnomer to refer to the proposed new Gambling
Act as "deregulation" as it will tighten regulation
in a number of key areas as much as it deregulates in others.
— The Central Dilemma—After an
extensive and thorough consultation and review process, we believe
that the central dilemma of balancing the rights of responsible
adults whilst protecting the vulnerable in society has been effectively
and fully addressed in these draft proposals. This view is supported
by the Business in Sport and Leisure market research of November
2003 which shows that over eighty per cent of the public would
not be anti gambling in a properly regulated environment.
2. SPECIFIC RESPONSES
TO THE
KEY ISSUES
IDENTIFIED IN
THE COMMITTEE'S
INQUIRY
2.1 For ease of reference, we have copied
the main themes set out in the written submission brief and then
given our response where we feel it is appropriate.
3. THE PROPOSED
FUNCTIONS, DUTIES
AND POWERS
OF THE
GAMBLING COMMISSION
3.1 Gala would like to stress the following
general points:
— Legislative Clarity—Effective
regulation depends on legislative clarity. It is important that
all points of legislative principle and any codes of conduct developed
by the regulator are clearly laid down and reviewed as a total
package.
— A Balanced Approach—There is
a need to maintain the "balanced approach" proposed
by the Gambling Review Body which attempted to balance the legitimate
commercial interests of the industry and the rights of responsible
adults with the protection of the vulnerable in society.
— Orderly Expansion—It should
be recognised that there is an enormous difference between orderly
expansion and "Casinos on every street corner". The
minimum size criteria will be sufficient to control proliferation
without restricting economic growth. Current estimates envisage
no more than 300 casinos at maturity which would seem to provide
the necessary prevention of proliferation.
— Competition—Any regulation
should not restrict competition, nor should it disadvantage existing
operators. See 6.2 also.
— National Lottery—We acknowledge
that the National Lottery is unique due to its role in generating
funds for good causes. However, we feel that as a mass market
wagering activity, it should be controlled by the Gambling Commission.
Moreover, the minimum age of play should be in line with all other
forms of gaming at 18 years and that the Lottery operator should
contribute to the Gambling Industry Charitable Trust.
— Future Proofing—In the light
of the ongoing representations on the linking of machines in casinos,
it is recommended that this issue should be left to the discretion
of the Gambling Commission, and not as proposed, be determined
by primary legislation.
4. PROTECTION
OF CHILDREN
AND VULNERABLE
PERSONS
4.1 See 1.3. Gala were at the forefront
of successfully establishing the Gambling Industry Charitable
Trust and are fully supportive of its brief to raise the £3
million identified as being required to research, educate and
treat social issues created by the new Bill. We are confident
that this can be achieved through arrangements within the industry
but support the concept of a statutory levy if this proves necessary.
5. THE PROPOSED
SECTORAL FRAMEWORK
FOR GAMBLING
REGULATION
5.1 Strict criteria must be established
to ensure that Local Authorities deal with licence applications
in a consistent and balanced way. The draft legislation currently
fails to address these key criteria and if this is not resolved,
licence applications will inevitably revert back to a form of
demand criteria, albeit indirectly, until case law becomes established.
5.2 The involvement of Regional Planning
Bodies should be strictly limited to planning (not licensing)
matters relating to "developments of regional significance".
Their brief should be to encourage and enable development but
not to restrict competition by tendering or granting regional
"franchises".
6. CASINOS
6.1 Gala has set out its detailed response
to issues relating to the casino market in its response to the
7 August position statement which we attach to this submission
as Appendix A. We would summarise the main issues as follows:
— The proposed three to one ratio of
machines to gaming tables will severely damage the competitiveness
of existing operators and has no rational basis. Gala recommends
retaining the eight to one ratio as this has a rational basis
in maintaining a fair balance in the number of available playing
positions of either type.
— Electronic versions of bankers games
should not be classified as machines or as live table games but
should be in a category of their own. Classification of these
games as machines would make a three to one ratio even more damaging
to existing operators.
— The linking of machines should be
allowed both within and across Casinos with a limit of no more
than 500 machines to be linked together at any one time.
— The term "available for use"
in respect of live table games needs a clear definition which
allows operational flexibility. Gala believes that customer demand
not regulation should dictate the number of live tables actually
open at any given time.
6.2 We would additionally like to reiterate
the world-respected credibility of existing UK gaming operators
and that the whole process to update current regulation was not
conceived solely to attract overseas investment. Therefore, existing
operators should not be completely disadvantaged at the expense
of any new entrants due to the proposals on machine numbers and
linking between casinos in grandfathered and small casinos.
6.3 We also propose that the legislation
recognises the fundamental difference between the very largest
Resort Casinos of "regional significance" and other
large (40+ table) casinos. We suggest that the number of machines
allowed at large casinos which are not of regional significance
could perhaps be limited to 1,250. This would mean that only Resort
Casinos would be permitted to have unlimited numbers of machines.
This proposal would allow the creation of a small number of Resort
casinos in locations directed by the RDAs but also create healthy
competition in the main conurbations, without the need for RDA
involvement.
7. BETTING EXCHANGES
7.1 No relevant comments to make.
8. REMOTE GAMBLING
8.1 No relevant comments to make
9. GAMING MACHINES
AND AMUSEMENT
WITH PRIZES
(AWP) MACHINES
9.1 It is our view that after all the reviews
and evaluations of the gambling market over the last four years
and subsequent consultations, the right balance between sectors
has been struck and the recommendations are sensible and appropriate.
10. BINGO CLUBS
10.1 As the leading bingo operator, Gala
would like to stress the fundamental strength and resilience of
Bingo which is inherent in its position at the heart of the community
in some of the poorest areas of our towns and cities.
10.2 The draft Bill and other recent deregulation
introduce some very sensible and long overdue changes which will
help the bingo sector to maintain its strong position in not only
the gaming sector but also in our local communities.
10.3 As a result of the fundamental strength
of the bingo product and the proposed changes in the sector, we
do not believe that the social element of the bingo experience
will be lost and it is unlikely that there will be a mass conversion
of Bingo sites to Casinos.
11 TAX IMPLICATIONS
11.1 Gala would fully support a taxation
regime where all forms of gaming were taxed in the same way and
at the same rate, provided that the rate was non-draconian.
11.2 We feel that a "Gross Profit Tax"
(GPT) style system would be the appropriate mechanism for delivering
betting and gaming taxation, as recently applied to the betting
and pools sectors. However, in this scenario, it is vital that
there should be no VAT charged on gaming income as there is still
in Bingo.
11.3 We further believe that any change
should be delivered as a package of measures and not achieved
via a piecemeal application to certain sectors thereby causing
further competitive differences during the interim period.
12. SOCIETY LOTTERIES
AND PRIZE
COMPETITIONS
12.1 No relevant comments to make.
December 2003
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