Memorandum from the Association of Licensed
Multiple Retailers (ALMR) (DGB 23)
As the only trade body exclusively dedicated
to representing the interests of UK pub and bar operators, the
Association of Licensed Multiple Retailers (ALMR) welcomes the
opportunity to submit written evidence to the joint committee
tasked with examining the Draft Gambling Bill. By way of background,
the Association currently represents around 100 pub companies—predominantly
small, independent groupings—between them operating in excess
of 30,000 outlets, half the UK pub estate.
The Association has liaised closely with the
other trade bodies in the sector to establish a joint position
on the Draft Bill, and explicitly endorses the submission made
by the British Beer and Pub Association on behalf of ourselves,
the British Institute of Innkeeping and the Federation of Licensed
Victuallers Association. Nevertheless, we also wanted to take
the opportunity to reinforce a number of points of key importance
to our members and to provide the Committee with copies of the
ALMR's previous submissions to Government.
The Government has not published, so far, those
parts of the Draft Bill relating to machines in pubs. This is
a major shortcoming and handicaps our response to the Committee.
Once these sections of the Draft Bill are published, we would
welcome the opportunity to provide further commentary.
The ALMR has a number of grave concerns about
the Government's proposals as currently drafted and believe that
they will have a deleterious effect on the competitive position
of pub gaming machines in the face of increasingly accessible
and attractive alternative forms of hard gambling. The Draft Bill
presents no opportunities or benefits to the pub trade—in
real terms the maintenance of the status quo in this sector
alone is effectively a tightening of the regulatory regime. In
contrast, other gambling premises will see a significant deregulation
of controls surrounding their location, accessibility and advertising.
The already unlevel playing field will be further distorted to
the detriment of many community and rural outlets.
We would wish to draw the Committee's attention
to the following points in support of this:
— Gaming machines are vital and integral
part of the pub offering and the financial contribution they make
to profitability should not be under-estimated. A recent survey
of ALMR members found that machine income normally contributed
thirty-forty per cent of net profits, although this rose to nearer
eighty per cent in the independent sector. Community and rural
tenanted pubs rely more heavily on machine income, and in some
cases it will be equal to the outlet's bottom line.
— This revenue stream is vulnerable.
Around one in five pub customers play machines but only a quarter
of those will be core players. The implications of this for machine
revenues are clear—if these players are attracted elsewhere
it can have a devastating impact on profitability. Pub machine
takings have declined by around ten per cent year on year since
the introduction of Fixed Odds Betting Terminals (FOBTs) on the
high street and we expect and fear this effect to be replicated
if the Draft Bill proceeds.
— The same survey of members found
that the average number of machines per outlet was 2.5, suggesting
that the proposed minimum of two machines as of right may be too
low.
In light of the above, the ALMR wishes to make
the following recommendations:
— The clauses of the Draft Bill and
detailed regulations relating to pub machines must be published
as soon as possible.
— The Draft Bill should contain an
explicit commitment to "Grandfather Rights" for existing
machine permits
— The proposed stake and prize limits
should be increased to lessen the difference between category
B and C machines and allow pubs—a controlled environment—to
offer a more attractive form of ambient gambling and entertainment
— There may be merit in allowing adult
only outlets—as defined in the Licensing Act and controlled
through licence conditions—to operate a restricted number
of category B machines in keeping with the regime applying to
members' clubs.
— Statutory National Guidance on licensed
sector conditions should be approved by Parliament in line with
the Guidance published on the Licensing Act.
We also explicitly endorse the key recommendations
included in the BBPA submission.
We should be happy to expand on any of these
points in additional written or oral evidence, in our own right
or as part of a joint industry presentation.
INTRODUCTION
As the trade body representing the interests
of pub and bar operators, the Association of Licensed Multiple
Retailers (ALMR) welcomes the opportunity to comment on the report
of the Gambling Review Body which was published on 17 July.
Currently around 100 companies are in membership
of the Association, between them operating over 25,000 outlets.
These companies are neither brewer nor individual tenant, but
include multiple operators and lessees as well as pub companies
who lease on properties to individual tenants. Members include
major pub chains such as Punch, Unique, Enterprise and Laurel,
managed operators such as Surrey Free Inns and a number of independent
companies operating under their own branding.
Gambling is currently regulated under the Gaming
Act 1968, which is now somewhat outdated and certainly out of
step with developments in modern entertainment, retailing and
hospitality provision. The ALMR therefore warmly welcomed the
Government's decision to establish the independent review body
with the stated aim of simplifying and modernising the regulatory
framework.
We are concerned, however, that the Review Body's
recommendations fail to take account of the unique pub environment
and the needs and concerns of pub operators in this context. We
are particularly disappointed to learn that the Review Body did
not visit any pubs or pub operators as part of its review, and
believe that, as a result, some of the statistics cited considerably
under-estimate the importance of gaming machines to the licensed
retail trade. If implemented, we believe that the Review Body's
recommendations will result in a more restrictive regulatory environment
for gaming machines in pubs, in direct contrast to the proposals
relating to the gambling industry. We therefore urge the Government
to review the proposals in the light of the comments outlined
below.
The Association notes that many of the Review
Body's findings in respect of pubs simply endorse the conclusions
of the Gaming Board's most recent triennial review; this recommended
in particular an increase in the stake and prize money for amusement
with prizes and all-cash machines from October 2001. Implementation
of these recommendations was put on hold pending the conclusion
of the Review Body's Report. The ALMR sees no reason for further
delay in the implementation of the Gaming Board's Triennial Review
findings, and further notes that they could be introduced without
the need for time-consuming primary legislation.
Reform of the entire gambling regime will be
a considerable task and will require a measured, consultative
approach. This will inevitably take time and will also require
detailed primary legislation. We therefore urge the Government
to press ahead with immediate implementation of the Gaming Board's
Triennial review findings in respect of gaming machine stakes
and prizes. This will be of considerable benefit to many thousands
of pubs, and in particular those in rural or community environments,
for whom gaming machine income is a considerable percentage of
overall profits, and who are facing considerable difficulties
as a result of the foot and mouth crisis and downturn in tourism.
For ease of reference, we have grouped our comments
according to the topics and in the order in which they are raised
in the report.
THE MARKET
Leisure is one of the fastest growing industries
and one of the UK's primary economic sectors. The sector is made
up of almost 250,000 companies, the majority of which are independent
small businesses, between them employing over 2.5 million people.
Spending on leisure in the UK has moved significantly ahead of
total discretionary spending over the last decade and now accounts
for £50 billion or ten per cent of GDP. In addition, the
sector is forecast to be the major provider of new jobs[2].
Pubs, clubs and bars are the single most important
component of the leisure and hospitality sector, accounting for
almost half its annual turnover and a fifth of all employees.
Around two thirds of the industry are independent, owner-operated
businesses, either freehold or operated under a lease from a pub
company or brewery. The financial contribution made to the public
sector by the industry is enormous: the pub alone generates a
stream of revenue above and beyond excise duty on beer (£2
billion), which includes corporation tax, national insurance contributions,
PAYE and VAT on food (£8 billion). A significant contribution
to revenue is made through gaming machine duty and VAT (£160
million) which has seen two twenty per cent increases in costs
over the course of the past five years alone.
Aside from their economic contribution, British
pubs are at the heart of their local communities. They provide
a social space not only for eating and drinking, but also for
other activities such as darts matches, pool, card and domestic
games, bowling alleys, entertainment and dancing. They are often
used as community centres, hosting formal and informal meetings,
drawing together football and cricket teams and encouraging charitable
events. Last year, British pubs raised £120 million for charity.
Despite these positive levels of growth, pubs
are coming under increasing pressure as a result of increasing
levels of regulation and red tape. A recent survey[3]
into the impact of this regulation on small businesses within
the sector found that one in five publicans feared becoming uncompetitive
as a result of increasing levels of red tape. This is as a result
of both the increase in direct costs and the administrative time
required to understand and comply with its provisions. On average,
small businessmen within the sector spend six hours a week dealing
with red tape and over half of them have had to employ extra resources
to cope with its demands.
It is widely recognised within Government and
by bodies such as the Better Regulation Task Force, the Small
Business Service, the Princes Trust and Business in the Community,
that the existing network of rural and community pubs may be under
threat. Many steps have been taken to sustain and promote pubs
as vital community services, but much more could be done to provide
a more supportive economic and regulatory framework. Inappropriate
or unduly burdensome legislation can have not only damage the
competitiveness of the sector, but may even undermine the viability
of the smallest businesses within it.
There is considerable scope to use the current
review of gaming to provide such a supportive framework, but the
Association believes that the recommendations as drafted fail
to take advantage of this and may indeed have a detrimental effect
by introducing a more restrictive regime than presently operates.
Gaming Machines in Pubs
Gaming machines are an integral part of the
total entertainment offering provided by many pubs. The ALMR is
concerned that the Review Body's report demonstrates little appreciation
of the importance or use of gaming machines in the pub environment
and that no pub visits were undertaken as part of the review.
In particular we question the review's assumptions about the average
density of AWP machines in pubs and the economic contribution
they make to the individual business.
It is estimated that around forty per cent of
all amusement with prizes machines (AWPs—including all cash
machines) are located within the UK's pub estate, with many also
offering a variety of skill with prizes machines such as quiz
machines, pinball and football games (these are outside the scope
of the current review). The ALMR has conducted a survey of its
members, which reveals that the average outlet has approximately
1.8 machines.
The industry is characterised by a quick turnover
of machines, with new and popular machines being introduced on
a rolling basis throughout the year. Few machines remain in a
pub longer than 12 weeks before being replaced with more up-to-date
games to maintain customer interest and maximise revenue. Around
one in five pub customers play on these machines, spending a small
amount each time—£2-£3—and receiving a high
guaranteed pay out of at least seventy per cent.
Nevertheless, these machines and the income
they generate for the individual licensee or company. Paragraph
6.26 of the Review Body's Report claims that the total turnover
of the pub industry is approximately £17.7 billion per annum
of which gaming machines contribute £0.6 billion or around
three per cent. This significantly under-estimates the contribution
gaming machine income makes to the profitability of the pub estate
and is based on a fundamental misunderstanding of pub economics.
The gaming machine contribution highlighted by the Review Body
is not turnover but net profit—machine rent, vat and duty
has already been deducted.
The ALMR has conducted a survey of its members
which reveals that machine income normally contributes thirty-forty
per cent of net profit. This figure has been averaged across our
membership, and the range of contributions varies from twenty
to eighty per cent. For tenanted pubs, that is those pubs operated
by self-employed small businessmen under lease from a brewery
or pub company, net AWP machine income is approximately £115
per week. In contrast, pool machine weekly income is £40
and skill with prizes machine income is £15[4].
Smaller outlets, particularly those in rural
or community-based locations, reply more heavily on machine income,
and in a small minority of cases it is directly equivalent to
their bottom line. These pubs tend not to enjoy a broad income
base, being drinks-led. Machine income therefore makes a significant
contribution to fixed running and overhead costs, and helps to
sustain these outlets. It should also be noted that machine income
is also used to subsidise investment in pub refurbishments and
any erosion in it may, over time, limit investment in the industry
as a whole.
The ALMR would urge the Government to ensure
that implementation of the Review Body Recommendations takes due
account of the importance of machine income to the Future viability
of many pubs and bars across the UK. We would further recommend
that no proposals are effected which would have the effect of
jeopardising that revenue stream or which penalise those operators.
Ambient Gambling
The Review Body recommends that gambling should
generally take place in gambling specific premises, which are
to be strictly regulated by a new Gambling Commission and subject
to separate premises and personal licences. The Report refers
to the concept of "ambient gambling" as the provision
of gambling facilities on premises whose main purpose is not gambling.
Whilst the ALMR believes it is helpful to differentiate those
premises whose primary purposes is gambling, we remain to be convinced
that the concept of "ambient gambling" is appropriate
or accurate to describe the playing of gaming machines in a pub
context. In particular, we are concerned that the term is used
negatively throughout as something which should be opposed.
Playing on a gaming machine is part of the overall
leisure experience of visiting a pub and cannot be separated from
the social experience as a whole. A good machine is an additional
attraction, and may bring in customers, but the primary reason
to visit a pub remains the enjoyment of an all-encompassing leisure
experience—including eating drinking and socialising with
friends. For some customers it involves playing on gaming machines,
but as has already been noted, this is on a relatively small scale
and is incidental to the overall pub visit/experience.
Clearly a pub or bar is not a gaming premises,
and it is right that it should not therefore be subject to the
same level of regulation and control as that applied to bingo
halls, casinos or betting shops. It is not clear from the Report
itself, but we assume that this will mean that pubs are not subject
to the proposed premises licence controls applied by local authorities.
We are concerned, however, that the Review Body
has used the term "ambient gambling" to apply a different
set of equally rigorous regulations to pubs and bars which would
have the effect of penalising premises where gambling is incidental
to their main business whilst at the same time relaxing the environment
in which hard gambling takes place. This seems perverse. We understand
the Review Body's desire to curb such gambling in non-adult environments,
such as taxi offices or take away outlets, but believe that pubs
fall into a separate category and should be treated as such for
the purposes of regulation.
The Review Body recommends that a new single
Regulatory authority, the Gambling Commission, should have responsibility
for regulating gambling throughout the UK. It goes on to recommend
that the licensing and controls of such premises should be handled
by Local Authorities, with broad ranging powers.
The ALMR believes that a single regulatory framework
will have the advantage of increasing consistency across the range
of regulation which presently exists, but ALMR is concerned that
it may lead to a "one size fits all" approach, in which
the needs and concerns of pub operators are overlooked or subject
to inappropriate controls better suited to dedicated gaming premises.
As has already been noted, the ALMR believes
that those premises which are not dedicated to gambling but nevertheless
provide a controlled, predominantly adult environment, should
be subject to differing and lesser degrees of control than those
premises dedicated to hard gaming. In particular, we believe that
the siting and control of gaming machines in pubs should remain
an adjunct of the liquor licensing process and system of control.
This will not only ease regulation and administration but enable
the two processes to be considered in tandem, thus avoiding any
duplication or imposition of contradictory conditions.
We believe that this section of the Report and
Recommendations are unclear as to the degree of control to be
applied to pubs, and we urge the Government to clarify this as
a matter of urgency.
Licensing of Premises by Local Authorities
The Report recommends that gambling venues should
be licensed by the Local Authority and subject to a separate premises
licence containing conditions of operation and use. A system of
penalties and sanctions would be applied if these operating conditions
were breached. The Local Authority would also have the power to
develop and impose a local policy in this area, including the
power to ban particular types of gaming premises from designated
areas, in order to address concerns about proliferation.
The ALMR does not believe that these controls
are either appropriate or necessary in a pub environment. At present,
gaming permits and numbers of machines are considered by the local
magistrates as an adjunct to an application for a liquor licence.
The two processes and procedures are operated in tandem, and to
all intents and purposes, applicants perceive them to be one and
the same application. The liquor licensing regime provides a means
of ensuring that the pub is suitable for the use to which it is
be put, that due consideration is given to public safety, order
and nuisance and that it is in the control of a "fit and
proper" person. We do not, therefore, believe that an additional
gaming premises licence is appropriate or necessary.
The Government should clarify that the premises
licence applies only to those premises whose primary purpose is
gambling, and that any new Local Authority powers to introduce
local policies in this area is equally restricted to premises
dedicated to gambling. As a matter of principle, the ALMR does
not support the introduction of blanket bans, but believes that
such a power would and should not apply to gaming machines in
pubs.
The ALMR believes that gaming permits for pubs
should remain an adjunct to the liquor licensing process. That
is the two applications would be considered in tandem and by the
same body, but would remain separate. We accept, however, that
there is merit in close alignment between the licensing and gaming
regime and that, over time, both may be controlled by local authorities.
We would urge the Government not to move control of gaming machines
to local authorities ahead of any changes to liquor licensing
control. A dual licensing process, whereby gaming machines permits
are handled by local authorities and liquor licensing applications
by magistrates would result in dual licensing, additional bureaucracy
and the potential for inappropriate or conflicting conditions
to be applied in either context.
We do, however, believe that there should be
greater consistency of approach by Whichever authority licences
the use of gaming machines, and wholeheartedly endorse the suggestion
that national guidelines should be developed—by Government,
the licensing authority and the industry—to ensure transparency,
fairness and consistency of approach. These guidelines would set
out common principles to be observed by the licensing authority
in the administration of the gaming regime, inform local interpretation
and application of national legislation. In particular, it would
set out standard application procedures, the way in which applications
will be considered, costs to be imposed and sanctions to be applied.
It will also set out those areas where the licensing authority
may exercise reasonable discretion to take account of genuine
and substantive concerns, and place limits on the exercise of
that discretion.
AWP CONTROLS
Chapter 23 of the Gaming Review Report makes
a number of recommendations on the siting of AWP machines in pubs
and changes to the stake and prize money which apply to them.
The ALMR believe that these proposals—particularly when
taken in the context of a more relaxed competitive and regulatory
environment for those premises dedicated to gambling—may
jeopardise valuable machine income streams for many pubs. In addition,
the regulatory controls which are proposed are regressive, introducing
a demand test for the first time, and are certainly not deregulatory.
The net result of the proposals will be that pubs are placed at
a considerable competitive disadvantage to other outlets with
gaming machines.
We therefore urge the Government to separate
gaming machines in pubs from the rest of the Gaming Review Report;
press ahead with implementing the Triennial Review proposals relating
to stake and prizes, which were due to take effect in October
2001; and, leave control of the siting and number of machines
in the hands of local magistrates, to be assessed on a case by
case basis as an adjunct to a liquor licence application.
Stake and Prizes
The Gaming Review Report rubber stamps the Gaming
Board's recommendations, contained in the last Triennial Review,
to increase the stake and prize for AWP and all-cash machines
to 50p and £25 respectively. This change was due to take
effect in October 2001, but was postponed in light of the Gaming
Review. The ALMR is concerned that no reference is made to an
implementation date for this change to take effect, and notes
that any further delay in implementing the changes will result
in an effective freeze in AWP stakes and prizes for the foreseeable
future. We therefore urge the Government to press ahead with this
change as soon as possible.
The Review goes on to recommend that maximum
stakes and prizes should, in future, be increased only in line
with inflation. This is unduly inflexible and archaic takes no
account of changes in overheads of costs, such as increases in
gaming machine duty or VAT. For example, in 1995-96 and again
in 1998-99, gaming machine duty rose by a staggering twenty per
cent thus eroding the income stream for operators until the prize
and stake were reviewed to take account of this. A formulaic increase
can take no account of these external factors.
Moreover, it will place gaming machines, and
in particular all-cash machines, at a considerable competitive
disadvantage, making them progressively less attractive to play
than easily accessible jackpot machines in betting shops, bingo
halls and other dedicated gaming outlets—some of which may
be located directly next to pubs—thus eroding machine income
and pub profitability.
Assuming an inflation rate of 2.5 per cent,
it will take eight years to get to a £30 maximum prize and
20 years to get to a £40 prize. An inflation based increase
may well result in illogical prize amounts, despite the recommendation
that the regulator should have discretion to agree common sense
roundings with the industry. This will be particularly true if
and when the UK joins the Euro. The psychology of the player and
consumer should be borne in mind here—a prize of £28
may be no more appealing than £25 and have little impact
in the market.
If an inflation-linked review is to take place,
the ALMR believes that consideration must be given to increasing
the starting point for AWPs both in terms of stake and prizes.
As has already been noted, be recommend that the 50p/£25
change should be made immediately but this should be adjusted
if inflation-reviews are introduced to maintain a ratio of one-fifth
prize-money with jackpot machines. This assumes a maximum prize
for the start of the new regime of £50.
Number of AWPs
At present, the number of machines sited in
a pub is currently determined by the local magistrates. Two machine
permits are granted upon request, but considerable discretion
is exercised to allow more permits per bar, taking into account
customer requirements, the size and type of venue and the nature
of the overall entertainment offering. This enables magistrates
and operators to tailor their offering to the type of customer
base they are seeking to attract, and in this way inappropriate
siting of machines is avoided. For example, an operator wishing
to attract a family based clientele, focused around eating out
is unlikely to apply for many machine permits, whereas a community,
drink-led local may wish to have a number of permits to meet the
demands of its adult customers.
The Review Body recommends that this system
of discretion and bespoke tailoring be replaced by an arbitrary
and absolute restriction on the number of machines to be sited
in any pub. This is a retrograde step, which places operators
and new applicants in a worse position than exists at present
and will impose additional restrictions on pub operators. In particular,
it imposes a demand test on pub-sited machines at the same time
as demand tests for premises dedicated to gambling are being abolished.
For example, in respect of casinos, the Review explicitly states
that "demand is best assessed by operators' commercial instinct".
We believe that this should equally be applied to pubs.
We believe that the figures quoted in the report
significantly under-estimate the density of gaming machines presently
in pubs and that the restriction to two machines will therefore
have a more significant impact on the industry than envisaged.
The report states that there are currently 77,000 AWP machines
throughout the industry, giving an average density of 1.28 machines
per pub, with a higher average density of 1.89 machines per pub
in the managed estate. The use of a mean average is extremely
distorting in this context as it includes those pubs with no machines
at all—a growing number of high-street bar chains such as
All Bar One and Pitcher and Piano have no machines on their premises.
The use of median or modal average gives a figure closer to 2-2.5
machines per pub, and it is interesting to note that over twelve
per cent of the total pub machines estate is located in a premises
with two or more machines. Only five per cent of pubs have more
than three machines.
The current trend is for pub units to get bigger,
and for multiple bars to be replaced with one large open-plan
room. Implementing the above proposal would also significantly
change the economics of this type of new-build pub, and has been
estimated to cost such operators £500 per week in lost machine
income from additional machines. It may also serve to decrease
the degree of control and supervision an operator and bar staff
are able to exercise over play.
The ALMR believes that the current system of
case-by-case assessment should be maintained, to allow operators
the flexibility to match supply with demand and take into account
the needs of their customers and style of operation. If an arbitrary
upper limit is to be applied, we believe it should be increased
to allow pubs to apply for a maximum of four machines permits
and be granted them as an adjunct to their liquor licence as of
right.
The Review Body suggests that those pubs with
more than two machines at the date of publication of the report
should be allowed to keep them. It does specify for how long they
may keep them nor what happens at the point at which a liquor
licence and associated permissions are reviewed or renewed. This
may happen if a pub is refurbished, extended or the nature of
the use is in someway altered or when a change of ownership takes
place. If the proposals on the number of AWPs is implemented,
the ALMR believes that pub operators with more than two machines
on the date at which the legislation takes effect should be able
to retain them in perpetuity and through any changes in the licence,
ownership or during renewals.
PROBLEM GAMBLING
The Gaming Review Body concludes that gambling
is widely enjoyed and harmless activity, but notes that one-two
per cent of players may be classified as problem gamblers. It
notes, however, that little research is available in this area
and recommends that a Trust be established to carry out a programme
of research in this area. The ALMR accepts that policy should
be based on robust and reliable research, and would support the
establishment of a publicly funded research programme, supported
by the gaming industry ie those companies or organisations whose
primary purpose is the promotion of gambling.
The report also notes concerns about under age
play. This cannot be considered in isolation from the National
Lottery, and we believe the present system of controls is anomalous.
Any changes in legislation or responsibility should therefore
be considered as part of a more broadly based review.
The pub industry already fully accepts that
children should not play AWP or all-cash machines, and successfully
operates a voluntary code of practice to ensure that this does
not happen. Moreover, publicans and bar staff are well used to
restricting access to age-related products and have policies in
place to ensure that this does not occur.
CONCLUSION
The ALMR warmly welcomed the decision to conduct
a wholesale review of gaming regulation and the Government's commitment
to adopt a deregulatory approach to remove unnecessary burdens
and restrictions from the industry and ensure that it is able
to respond to modern consumer demands and tastes.
We are therefore concerned that the proposals
in relation to gaming machines in pubs run directly counter to
this stated objective and, if implemented, will result in a regulatory
and competitive environment which is considerably worse than that
enjoyed by operators at present. In view of the fact that the
majority of pubs draw at least a third of their profits from machine
income, and a significant minority of rural and community are
even more reliant upon it to maintain both profitability and viability,
we are particularly concerned that the proposals as drafted would
progressively undermine and erode this income stream. They would
also effectively penalise businesses whose primary purpose is
not gambling, whilst at the same time promoting businesses dedicated
to this activity.
The ALMR believe that gaming machines in pubs
should be considered in isolation from the broader proposals relating
to reform of the gaming regime for those premises dedicated to
gambling. In particular, the proposals relating to local authority
licensing and local policies on gaming premises should explicitly
exclude pubs. Regulation of pub machines should remain in the
hands of the local magistrates and as an adjunct to the liquor
licence.
The ALMR would also put forward the following
recommendations:
— The Gaming Board's Triennial Review
recommendations concerning AWP stake and prizes should be implemented
without delay.
— When the full Gaming Review recommendations
are implemented, this should be increased to a £50 prize
to retain the competitive position vis a vis jackpot machines.
— The prize and stake should continue
to be determined by an ad hoc review and should not be linked
to inflation.
— The number of AWP machines should
continue to be determined on a case by case basis with two permits
as a minimum and the opportunity to apply for more.
— If an arbitrary limit on the number
of machines is to be imposed, pubs should be able to apply for
up to four permits.
The ALMR would be happy to meet to discuss these
recommendations, or any aspect of this paper, further.
December 2003
GAMBLING BILL
POLICY INSTRUCTIONS
I have received a copy of the policy instructions
on which the proposed Gambling Bill is to be based. As the trade
body representing the interests of pub and bar operators throughout
the UK, the ALMR is keenly interested in the development of policy
in this area, and wishes to register our interest to be actively
involved in any future consultation.
The ALMR was formed in 1992 specifically to
represent the interests of those companies that own five or more
pubs or bars. Currently there are 95 companies are in membership,
between them owning or operating around 30,000 outlets—approximately
half of the total UK pub estate. Members include major pub companies
such as Punch, Unique and Enterprise, managed operators such as
Regent Inns and Laurel Pub Company, the tenanted estate of regional
brewers and a number of independent companies operating under
their own branding. As well as pubs and bars, our members also
operate restaurants, clubs and café bars.
Our particular area of interest in respect of
the Gambling Bill is the licensing of category C gaming machines
in pubs and bars. I appreciate that there will be further consultation
in due course, but I thought it would be helpful to set out our
initial comments in respect of the draft policy instructions:
— Timing: clearly it is impossible
to predict when the Bill will be introduced and particular aspects
be brought in. We note that the policy instructions suggest that
certain clauses may be brought in independently and obviously
the licensing of gaming machines may be handled separately from
the more controversial deregulation and licensing of dedicated
gambling premises. Nevertheless, we would urge the Government
to allow the new Licensing Bill to take effect and the new regime
begin operating before any changes are made in respect of gaming
permits.
— Prize Limits: we note the suggestion
that the maximum stake for category C gaming machines be increased
but that the prize limit should remain as at present. Given that
some time will have elapsed between the last increase taking effect
and the new proposals being introduced, we recommend that this
maximum prize limit be increased to ensure that pub machines remain
competitive in the marketplace.
— Statutory Codes of Practice: we note
that the Gaming Commission will issue statutory codes of practice
prescribing requirements for the location and control of machines
within premises. We believe that these should be subject to full
public consultation and scrutiny by Parliament before being adopted.
In addition, we note the reference in the document to the effect
that Ministers are keen to ensure that protection of children
does not lead to unnecessary interference with businesses providing
AWP machines. We trust that this approach will be carried across
to the statutory codes of practice.
— Grandfather Rights: we welcome the
clarification in the policy instructions that full grandfather
rights will apply enabling all existing machines permits to be
converted to new permissions under the new regime, regardless
of the number held. We note suggestions that for new applications
there will be maximum number of permits granted automatically,
but would continue to resist the suggestion that this number be
set at two per outlet.
— Who holds a permit: the policy instructions
make no specific reference as to who may apply for or hold a gaming
machine permit. Under present licensing law, the licensee is clearly
identified, but under the new regime there will not necessarily
be an individual who could constitute a "permit holder"
as referred to in the policy document. The alcohol/entertainment
premises licence may be held by a company rather than an individual.
It is important that there is consistency between the two regimes.
— Gambling in pubs: the policy instructions
make reference to the regulation of bingo in pubs, but there is
no reference to other forms of gambling in pubs such as on-line
lotteries and other forms of gambling. Some clarification in this
area would be helpful.
In conclusion, may I reiterate the desire of
the ALMR to be actively involved in the consultation process as
we move forward and our intention to provide practical help and
assistance to the Bill team if at all possible.
2 Business in Sport & Leisure The Active Annual
1999. Back
3
The Impact of Regulation on Pubs-The Red Tape Campaign (September
2000). Back
4
All figures quoted as at August 2001 and are net of VAT, rent
and duty (John Painter & Associates-What Amusement Machine).
GAMING REGULATION Back
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