Select Committee on Culture, Media and Sport Minutes of Evidence



Memorandum submitted by Business In Sport and Leisure

 

INTRODUCTION

  Business In Sport and Leisure (BISL) is an umbrella organisation which represents nearly 100 private sector companies in the sport and leisure industry. Our members include the major operators of commercial leisure and many consultants who operate in this field. Sectors represented within our membership include operators of casinos, bingo, betting, pools, greyhound and horse racing, motorway service stations, snooker and ten pin bowling centres, pubs and suppliers of gaming machines.

  Business In Sport and Leisure is significant because, as far as we are aware, BISL is the only umbrella organisation representing all major sectors within the Gambling industry. A full list of our members and our activities can be found on our web site at www.bisl.org.

THE ECONOMIC VALUE AND PUBLIC PERCEPTIONS OF GAMBLING IN THE UK

  In May 2000, Business In Sport and Leisure published the KPMG study on The Economic Value and Public Perceptions of Gambling in the UK. A copy of this study is enclosed

  The study found that the main economic benefits associated with the industry include:

    —  An annual turnover of 7.35 billion, which represents actual stakes of 42.1 billion per year.

    —  Employs in excess of 170,000 people.

    —  Government duty alone is in excess of 1.5 billion and this excludes corporation tax and national insurance contributions.

  In terms of attitude towards gambling, the study found that:

    —  Most people think that most forms of gambling are socially acceptable.

    —  89 per cent gambled at least once in the previous year and a majority of the population gambled between one and three times each week.

  Since the KPMG Study was published, the Gambling Review Body has completed its investigation and the Government has published its response in "A Safe Bet for Success".

  In "A Safe Bet for Success", paragraph 7.1 the Government says "In the Government's view the law should no longer incorporate or reflect any assumption that gambling is an activity which is objectionable and which people should have no encouragement to pursue. It is an important industry in its own right, meeting the legitimate desires of many millions of people and providing many thousands of jobs." In the partial Regulatory Impact Assessment, the Government estimates that if all the proposals were implemented that "gambling expenditure (ie stake less winnings) in the UK gambling sector and its constituents parts including the National Lottery will increase by an annual average 567 million between 2004-05". Comparing this with the current industry size set out in 2.2 above suggests that the impact of the proposals in "A Safe Bet for Success" is anticipated to be an increase of some 7.7 per cent in the annual consumer expenditure on gambling.

  The DCMS Select Committee has chosen to concentrate during this inquiry on a number of issues regarding gaming machines, changes to the casino industry and proposals with regard to changes for the National Lottery. BISL would like to comment on these issues as follows:

THE IMPACT OF THE PROPOSALS ON THE SUPPLIERS, LESSORS AND THE USERS OF GAMING MACHINES

  Business In Sport and Leisure expressed concern, following the publication of the Gambling Review Body report, about the concept of "Ambient Gambling". In essence, the Gambling Review Body wished to restrict gambling to places where the primary purpose of the premises was for gambling. This led to recommendations that jackpot gaming machines with a 250 prize should be removed from members clubs and that licensed premises could retain their existing number of 25 all-cash machines, however, new premises would only be allowed a maximum of two machines.

  In "A Safe Bet for Success" and following pressure from many within the industry, including BISL, the Government has proposed that Gaming Machines are re-categorised as follows:

    —  Category A—only to be allowed in casinos and offering unlimited stakes and prizes.

    —  Category B—Jackpot machines with a stake of 1 and a maximum prize of 500 (250 in members clubs).

    —  Category C—all other gaming machines with a maximum stake of 50p and prize of 25.

  It is proposed that Members clubs will be allowed to retain up to three category B machines with a maximum prize of 250 and licensed premises will be allowed to have two category C machines as of right, with more at the discretion of the Local Authority.

 

  There is no proposal in "A Safe Bet for Success" that licensed premises should have "Grandfather Rights" ie retain their what they currently have once new legislation becomes law. BISL believes that it is essential to the viability of existing premises that Grandfather Rights are allowed and that it makes no sense in terms of bureaucracy for premises to have to re-apply for machines already on the premises.

  BISL supports the recommendations made in "A Safe Bet for Success", but cannot support certain important gaming machine proposals given the inconsistencies this would create between industry sectors represented by BISL. The restriction on the number of gaming machines appears to be is linked to the protection of children, but it is clearly anomalous to treat a club and a licensed premise differently in this respect. Both types of premises admit children (current restrictions on pubs are expected to be lifted in a new Liquor Licensing Bill). There will rightly be a requirement to prevent children playing gaming machines and a licensee will be required by law to ensure that children do not play these machines. It should be noted that the Licensed Trade has always supported this position, but the Government has previously considered further restrictions unnecessary in these environments which are already controlled. It does however, seem a little illogical that children in members clubs in the proposals will be in premises with three category B machines (maximum prize 250), and yet it proposed to restrict licensed premises to two category C machines, maximum prize 25 with more available on application.

  Furthermore, the new proposal in "A Safe Bet for Success" to remove the right of licensed premises to retain even their existing numbers of machines is a cause of great concern. This proposal is unwarranted when Licensing Magistrates have already granted a higher number of machines following consideration of applications from individual sites. Under current proposals approximately 12,000 licensed premises would have to re-apply to retain their existing number of machines with the associated bureaucracy and cost.

 

  Business In Sport and Leisure proposed, following the report of the Gambling Review Body, that licensed premises should be allowed four category C machines as of right and would wish this to be reconsidered.

  It is crucial for the industry that Local Authorities do not withhold permission for additional machines unreasonably, nor apply unduly onerous conditions. These issues must be subject to national guidance which is binding on local authorities.

MIX OF MACHINES

  Both the Gambling Review Body report and the Government's response tend to assume that all licensed premises are pubs, but this is not the case. BISL has a number of members who operate other types of licensed premises such as horse and greyhound race tracks and cue sports and ten-pin bowling premises, where the number of machines is different. BISL is concerned that the national guidance to Local Authorities recognises the opportunity to consider different types of licensed premises.

  There is a particular concern for operators of ten-pin bowling about the mix of machines allowed in their outlets. Most ten-pin bowling outlets have a number of all-cash AWP machines, combined with "pushers" and "cranes". In the Gambling Review Body Report and the Government Response, there is an indication that if 'pushers' have more than one place to play (like a fairground machine which is round and a number of people try and manoeuvre the pusher so that coins fall over the back) that each place of play will be accounted for as one machine. BISL would wish the Government re-consider this proposal which seems too prescriptive for such machines.

  In addition, cranes are proposed to be restricted to a 10p stake and a 5 prize which fails to reflect the nature of the product and the fact that a prize, as opposed to cash, is being won. Cranes are important to a number of our members and therefore we would propose that a 25p stake and 5 prize be applied to this unique product. This seems a minor change, but it is an important one to our members. A 25p prize would allow prizes to be won on a more regular basis.

DEFINITION OF AREAS FOR THOSE OVER 18

  The Government's response document stipulates that operators will be responsible for controlling areas where children have access to gaming machines. BISL supports this requirement and the wording "controlled and clearly identified areas", but strongly resists physical barriers in respect of licensed premises that would needlessly change the character of the licensed premises. BISL would recommend control through good management and appropriately agreed notices. GamCare has indicated support for this approach and the Gaming Board already gives advice through its "Memorandum of advice on siting of machines". The law as proposed on underage play will provide sufficient sanction in its own right without introducing a raft of inappropriate red-tape and cost and there is already sufficient good practice which exists within premises of members of BISL which should be built upon.

THE POTENTIAL CONTRIBUTION OF CASINO-DEVELOPMENT TO THE ECONOMY, BOTH NATIONALLY AND LOCALLY

  In 2001, the net loss in terms of balance of payments for the tourist industry in the UK was 14.6 billion. In the last five years visits to the UK were down by 8.5 per cent and visits by UK residents going abroad up by 28.5 per cent. 400,000 UK residents visit Las Vegas each year, which is higher than any European country.

  The Government's decision to change betting tax was to recapture companies who had moved offshore. The same argument applies to casinos. All casinos will make the UK more attractive for tourists. They will attract visitors here to both inland and seaside British resorts instead of travelling to Las Vegas.

  Business In Sport and Leisure supported the development of resort casinos in our evidence to the Gambling Review Body and are pleased that the Government sees no reason why their development should not move forward. There is no doubt that regeneration of our seaside resorts like Blackpool can be brought about through the use of casinos as anchor tenants. Many members of the Select Committee attended the recent lunch, arranged through the All Party Sport and Leisure Group, with the Mayor of Atlantic City. In his speech, he talked about the regeneration achieved in Atlantic City through gambling, but that gambling operators not only provide local employment and economic regeneration, but that they all contribute to the wider regeneration objectives of the city. In the UK the new Business Improvement Districts could work in a similar way for resort casinos in seaside resorts.

MACHINES V TABLES

  7.1  In the Government's response, they indicated a review of the number of gaming machines allowed in casinos. The Gambling Review Body report proposed that this should be linked to the number of tables, but all this is likely to do is encourage operators to increase the number of tables to allow them to put in extra machines. BISL proposes that the number of machines is left to market forces and commercial considerations.

NUMBERS OF CASINOS

  Great concern has been expressed about the roll out of casinos and the social concerns about over expansion too quickly. This concern about potential over-expansion should be contrasted with the above estimate of only 7.7 per cent growth in potential consumer gambling expenditure.

  The current Permitted Areas were established in 1972. There are 53 permitted areas which were based on the 1971 census and had a local population of 125,000. Recent evidence carried out by Professor Neville Topham for the Home Office failed to find any connection between the number in the population and the financial success of casinos which proves that basing casinos around population data is outdated.

  Business In Sport and Leisure believes that the growth of casinos will be controlled through a minimum size of casinos, although it believes the proposed minimum of 2,000 square feet of table space is too small. It also believes that the quality of the regulatory regime provided through the Gambling Commission will ensure that only fit and proper operators are permitted to run casinos which will in itself control expansion.

  It is essential that the new Gambling Commission is given the resources to regulate and inspect gambling premises. BISL would like to see a shadow Gambling Commission established well before the law is changed to ensure that they are up and running and are therefore able to provide and continue the quality of regulatory regime which is so admired by so many countries through the world.

THE SOCIAL IMPACT OF THE CHANGES PROPOSED AND THE SAFEGUARDING OF THE YOUNG AND OTHERWISE VULNERABLE

  Business In Sport and Leisure has worked for many years on good corporate social responsibility and on how private sector companies contribute to social inclusion. We were members of the DCMS Advisory Group on Social Inclusion and played a major roll in encouraging our members to contribute to the new Trust set up to fund problem gambling.

  All members of Business In Sport and Leisure have a strong commitment to social responsibility in gambling. They are committed to modernisation, whilst protecting the young and vulnerable and ensuring that they conduct their businesses with the utmost probity.

  BISL would support a "fit and proper" test for all those with a personal or premises licence for gambling, which would include a requirement to have policies to protect young people and support policies and treatment for those who have a problem with gambling.

  Business In Sport and Leisure believes that the Gambling Commission, the Police and Local Authorities must work together to ensure that gambling is effectively controlled and that any bad practice is eradicated.

PROTECTION FOR THE NATIONAL LOTTERY

  Business In Sport and Leisure supports the Government's decisions to protect the National Lottery and ensure funding continues to be made available to good causes, particularly sport.

  BISL believes that the Government has dealt with this issue in a proportionate manner. This will preclude betting on the outcome of the National Lottery and restrictions on prizes for society lotteries, but the suggestion that rollovers for bingo would effect the National Lottery were in our view overblown. BISL is also pleased that the stake and prize for society lotteries has been doubled.

  BISL does, however, believe that the National Lottery should not have a privileged position in respect of age control. If access to gambling by children is of concern then we do not understand the anomalous position of the National Lottery.

LOCAL AUTHORITIES

  Business In Sport and Leisure is concerned that strong national guidance be issued to local authorities if they are to have control over the new premise licence. As with liquor licensing, BISL understands that the Government is committed to local accountability through local authorities, but it is essential for the industry that local objections by minority opinion are not allowed to prevent the obvious pleasure that 89 per cent of the population enjoy from participating in gambling as a leisure activity.

  In "A Safe Bet for Success", the Government states in paragraph 3.10 "The Government does, however, accept that it would not be appropriate to give local authorities unfettered discretion to determine whether or not a premises licence should be issued or on the conditions attached to licences, such as those relating to opening hours". Members of BISL have experience of local authorities who control gambling in Scotland who create local anomalies and local restrictions. It would be very against this treatment being recreated in England and Wales.

  BISL was strongly against the proposal in the Gambling Review Body report that local authorities could impose blanket bans. This could have led to individuals opposed to gambling creating "zoning" where some local authorities allowed certain forms of gambling and some did not. The Planning Policy Guidance (PPGs) system works well for land-use planning, whereby DTLR issue national guidance to local authorities. Business In Sport and Leisure believe that a similar system should exist with national guidance given by the Gambling Commission to local authorities. It is essential that local authorities are required to follow this guidance.

IN CONCLUSION

  Business In Sport and Leisure fully supports the proposals put forward by the Government in "A Safe Bet for Success". There is a need for more work to be done on certain proposals as shown in this evidence. BISL looks forward to working on gambling policy as part of the DCMS working group set up for this purpose.

  There is a real need for change. The current Gaming Act 1968 is totally out of date and in need of total reform. Chapter 9 of "A Safe Bet for Success" looks at how the Government plans to take forward the changes proposed. Business In Sport and Leisure would like to see as many proposals as possible taken forward by Regulatory Reform Orders, but is mindful of the decision of the Committees in the Houses of Commons and the Lords which indicates that many of the changes proposed for Regulatory Reform are unlikely to be considered within their remit as "appropriate" for this treatment.

  A demonstration of the real need for change is the anomaly that if you win 1,000 in a casino it can only be paid out in coins!

  Business In Sport and Leisure very much hopes that the Select Committee will recommend that the Government find legislative time for a new Gambling Bill as soon as possible. Uncertainty for business is an expensive commodity and there is a real danger that the momentum will be lost if time is not found for legislation in the 2003-04 Parliamentary session.

3 May 2002

 


 
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