Memorandum submitted by Six Continents
Six Continents Retail Limited interests include
2,000 managed pubs and bars and 22 ten-pin bowling sites in the
UK. The company has 4,000 all-cash AWP machines sited plus a further
200 other gaming machine products such as cranes and pushers.
Gaming machines are important to us in terms
of the entertainment they provide to customers and in their valuable
contribution to company profits.
We are aware of numerous demands for wide-ranging
change in the UK gambling laws from industry, the Gaming Board
of Great Britain and others. We believe the main impact of the
proposals on the leisure industry in the UK will arise from the
changes to machine legislation.
The proposals, as currently written, would enable
a proliferation of gaming machines in casinos, betting offices
and bingo; whilst being unduly and unfairly restrictive on pubs.
We believe that casinos would become essentially arcades with
gaming tables merely being used to legitimise such arcades. Furthermore
we are concerned that there could be a proliferation of casinos
and bingo in the UK, not because of table games and bingo but
because of the opportunity to site machines; a case of primary
purpose being pushed to breaking point. It is likely that the
UK casino model will rely on machines for between 50 per cent
and 97 per cent of income, as is the case in Las Vegas and France.
Bingo would benefit not only from £500 and £25 jackpot
machines and liberalisation of bingo prizes, but also from an
elimination of the 24 hour membership rule. This means that bingo
will no longer be a "club", other than by name, and
will be able to offer everything that a pub can offer to the general
public and more. Clubs will have the same offer as pubs, except
for an advantage in respect of machines with £250 jackpot
We are not objecting to the liberalisation in
other retailing sectors and the likely proliferation of machines
per se that this will cause, however, we do believe pubs under
the current proposals are being handed an unfair position.
Machines have been in most of the 60,000 pubs
in the UK for over 30 years without issue or public concern, a
remarkable achievement in our opinion and a tribute to the well
controlled, essentially adult, environment. Pubs employ 650,000
people and our own organisation in excess of 40,000 people. Machines
throughout the UK are an important contributor to profit and pubs
also provide the third largest proceeds from gaming to the Treasury.
Of the 0.6 per cent to 0.8 per cent of the UK
adult population that are problem gamblers approximately 2.5 per
cent relate to fruit machines in pubs, hardly cause for the harsh
treatment of pubs relative to other sectors.
We believe that the above facts serve to briefly
highlight the issues arising from the proposals in respect of
"A SAFE BET
We are grateful to the DCMS for the decision
to allow reviews of stakes and prizes in the future based on all
the available information, rather than solely inflationary increases;
as well as the proposal that Local Authorities would have discretion
to allow more machines in appropriate cases.
However, we have serious concerns with the current
proposals which are covered below.
Protecting the Young and Vulnerable
It is proposed that machines be sited in "effectively
controlled and clearly identified areas" in both pubs and
clubs. We agree with the essence of this proposal, but have the
considered view that it would be best delivered by good management
control and appropriate notices. We would definitely not want
to have to introduce physical barriers in the form of walls, screens,
ropes or lines on carpets that would introduce needless cost and
lead to the removal of machines for no good reason and ultimately
not assist in controlling risk. A pub or club would have to control
the risk to the young and vulnerable to maintain the siting of
these machines by law, and that in itself provides sufficient
deterrent without the introduction of inappropriate measures in
an already well controlled environment. Gamcare indicated in a
recent Gambling Conference that it agrees with the approach advocated
by pubs. There would also need to be firm national guidance to
ensure consistency of approach by Local Authorities and to avoid
making an industry of this matter through red-tape as well as
the removal of machines for no good reason.
We believe the good liaison work being carried
out by the officials of the DCMS should be able to produce a workable
solution, but we wish to emphasise the importance of achieving
progress in this area of concern.
Machine Numbers in Pubs and other Licensed Premises
It is proposed that pubs be allowed 2 x £25
machines with Local Authority discretion to allow more in appropriate
cases. This is compared to 3 x £250 machines for clubs, 4
x £500 machines, plus numerous £25 machines in bingo
halls. This proposal would mean removing existing rights in 11,000
pubs, all of which have already been approved by Licensing Magistrates,
as well as providing no cause for concern. The industry seeks
4 machines as of right with more on application. In recent years
Magistrates have taken a more consistent attitude to the numbers
of machines they will Permit and allowed additional without this
leading to a proliferation of machines. We believe that applications
for more than 2 x £25 machines as proposed should not be
unduly onerous, and certainly be no more difficult than the current
process. In essence we wish to reduce bureaucracy with our proposal,
and seek something that we believe already exists in practice.
We have considered using size of premises related to numbers of
machines to produce a simple formula, however we have rejected
this as inappropriate since it would not take account of the nature
of a particular pub. Our analysis indicates there is not a direct
correlation between size of premises and numbers of machines because
of the varied trading styles between different pubs. The common
factor is that all these pubs are well controlled environments
with permission from Magistrates to carry on their lawful business.
Machine Maximum Stakes and Prizes
Pubs welcomed the introduction of a new £25
prize level on 1st January 2002. It should also be noted that
this level, which is very low compared to the proposals for other
sectors, was sought by the pub industry as part of a longer term
vision of £50 in January 2004. In the last 10 years there
has been an increase in the maximum prize from £4.80 tokens
to £25 cash, whilst a low level of gambling prevalence was
assessed in 2000 by the Gambling Prevalence Study when the prize
was £15 (since then we have nothing to suggest an increase
in problems). The £25 prize level is very modest compared
to clubs and bingo halls which will under the current proposals
be offering virtually the same, if not the same, products as pubs.
Pubs seek a level playing field in any new legislation,
not competitive advantage.
"Cranes" and "Pushers"
Six Continents has 22 ten-pin bowling sites
that trade under the brand name Hollywood Bowl ,with two more
sites scheduled to open later this year. "Cranes" and
"pushers" in these sites have provided entertainment
for many years along with all-cash AWP machines and AWP machines.
All these machine types are very well managed in Hollywood Bowl
and we choose to operate "controlled" areas through
various good management methods.
In "A Safe Bet for Success"
it is implied that if "pushers" have more than one coin-slot
for play (eg a hexagonal machine with separate play positions
around it) then each play position will be a separate machine;
which clearly it is not and never has been. We would request that
DCMS re-consider this proposal.
Furthermore "cranes" are proposed
to be restricted to 10p stake and £5 prize which fails to
reflect the nature of the product and the fact that a prize, as
opposed to cash, can be won. "Cranes", which we currently
operate on a 25p stake and maximum £5 prize, may to many
be a detail, but are nevertheless an important aspect of our Hollywood
Bowl business. We propose that this machine type, which the Gambling
Review proposed to take out of the control net altogether, be
controlled with a maximum 25p stake and £5 prize with reviews
from time to time.
These seemingly minor changes in respect of
the proposals for "pushers" and "cranes" are
important to our business.
Six Continents Retail believes that very careful
consideration of the impacts of the proposals needs to occur,
along with subsequent detailed implementation plans, so as to
avoid adverse unforeseen consequences.
We believe the DCMS is engaged in a professional
process that we hope will resolve the legitimate concerns expressed
on behalf of pubs.
We would be very pleased to assist in providing
further evidence to the Committee.
3 May 2002