21. Memorandum from Leisurelink
Group plc (GMB 4)
This is the Leisure Link Group submission to
the Joint Scrutiny Committee of the Draft Gambling Bill which
has been reconvened to consider and report on the Government's
response to recommendations 79, 80, 81, 83, 84 and 85 of the original
Scrutiny Committee report (Cmd 6253).
Leisure Link Group is one of the UK's largest
manufacturers and operators of gaming machines and an important
domestic stakeholder in the current legislative process. The company
has a substantial UK investment programme and employs 2,500 people
throughout the country, as well as working with many hundreds
retailers and smaller supply companies.
Throughout the process of consultation on gambling
law reform, Leisure Link Group has welcomed the challenges and
innovation which proposed changes will require of it in the future.
It has, in the past, distanced itself from other groups which
have lobbied for the status quo in the casino and other markets,
preferring to work constructively with the Government and the
Scrutiny Committee in order to find a formula for legislative
change which fulfils the Government's main criteria for reform,
including protecting the vulnerable.
However, the Government's response to the JSC
report represents a significant departure from the process of
consultation with key industry stakeholders which had, until now,
begun to create a new environment for the casino market which
would allow both UK incumbents and new overseas entrants to compete
fairly—as was the Government's originally stated intention.
In our view, It is highly unlikely that the
Government's proposals will achieve what they are supposed to
achieve. According to Leisure Link Group's analysis, there are
likely to be more Category A gaming machines in the UK under the
new Government proposals than if the original JSC recommendations
had been adhered to.
LEISURE LINK
GROUP'S
CONCERNS IN
RELATION TO
CLAUSES 79 TO
81 AND 83 TO
85
— Leisure Link Group is concerned by
the Government's decision to introduce a completely new policy
without proper consultation with the industry, which restricts
Category A Gaming Machines to Regional casinos. The measures proposed
by the Government will disadvantage incumbent casino operators
and will provide a disproportionate competitive advantage to new
overseas entrants.
— The Government's proposals will create
two categories of casino (small/large; and Regional): both of
which will have to pay the high costs of regulation but only one
of which will be able to make competitive returns. Smaller casinos
will become little more than glorified Adult Gaming Centres.
— Whilst Leisure Link Group agrees
entirely with the Governments clearly stated intentions to minimise
the potentially negative impacts on vulnerable people, the DCMS
response does not reflect the demonstrably responsible activities
of the UK operators which has ensured very low levels of problem
gambling to date.
LEISURE LINK
GROUP'S
PROPOSALS
Machines
— The Government should reconsider
its prohibition of Category A machines in small and large casinos.
All casinos will be subject to tough regulatory environments.
The problems envisaged—of convenience and repetitive gambling—by
the Government simply will not arise.
— Category A machines should be available
in small casinos up to a maximum of 50% of total machines and
subject to a ratio of two machines per gaming table available
to play in small casinos; and five machines per table gaming machine
available to play in large casinos.
— Category B machines will also be
available in both types of casino subject to a ratio of two machines
per gaming table available to play in small casinos; and five
machines per gaming table available to play in large casinos.
Stakes and prize limits for Category B machines installed in casinos
will be increased to reflect the specific regulatory controls
in place in casinos, as opposed to other venues in which Category
B machines are currently located. Leisure Link Group proposes
these are lifted to a maximum stake of £10 and a maximum
prize of £50,000.
— All machines in casinos would be
random in order to underpin the Government's desire for maximum
player protection.
Casinos Size Definitions
— The Government's minimum size threshold
for a Regional casino is 5,000 sqm of gaming space. This would
result in between 30 and 50 Regional casinos being built. Given
the Government's concerns over machine proliferation, this is
presumably not want the Government wants. Therefore, Leisure Link
suggests that the minimum gaming floor space is increased to 10,000
sqm, with other facilities including hotel accommodation, retail,
restaurants and bars by licence condition.
— The Government is concerned proliferation
of smaller casinos. These concerns can be addressed more effectively
by raising the size threshold of new small casinos to 1,500 sqm
of gaming space.
COMPETITION ISSUES
Leisure Link Group believes that he Government's
proposals will reduce competition in the casino market. This is
contrary to the Government's own clear and unequivocal position
that competition between firms leads to strong and effective markets
and protects consumers.
The exclusive provision of Category A machines
will make Regional casinos more attractive to customers and will
allow Regional casinos to achieve economies of scale denied to
small/large casinos. These two factors will severely limit the
ability of small/large casinos to compete for business with Regional
casinos, especially as the former category will be operating under
the same regulatory cost burden as the latter.
June 2004
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