17 September 2001
The Gambling Review Body report received wide publicity, but the casual reader might have been left with the impression that the main recommendation was for Las Vegas-style gambling in Blackpool. In fact, it contains far-reaching proposals for reform of the law governing betting and gaming. In practice, the report may well suffer the same fate as similar reports and gather dust on a minister's shelf. The Government may well conclude that any gain in tax revenue is insufficient to justify the risk of unpopularity arising from widespread opposition to the quadrupling of the number of casinos and a doubling of the number of betting shops in the UK.
It is unlikely that existing operators will embrace the proposed changes in their totality - they have far more to lose than to gain. The only real pressure for change is likely to come from those with a commercial interest in breaking into a tightly regulated market. The Gambling Review Body recognises potentially harmful effects of deregulation, but concludes that these do not outweigh the desirability of a liberal approach.
There are 176 specific recommendations. The main proposals are: betting and gaming regulation should be incorporated in a single act; all betting and gaming activities should be controlled by a gambling commission; the existing system of the licensing of individuals in the casino business should be extended to betting shop managers; the requirement to demonstrate demand for an additional betting shop or casino should be abolished; the requirement that casinos can be established only in certain towns and cities should be abolished; casinos should be allowed to provide opportunities for betting and bingo on their premises; casinos should possibly be permitted to install an unlimited number of slot machines with unlimited stakes and prizes; the prohibition on consumption of alcohol on the casino gaming floor should be removed; casinos should be allowed to provide live entertainment; bingo halls should be allowed to offer unlimited prizes; betting shops should be allowed to have jackpot machines; betting on the National Lottery should be allowed; and the requirement that only packaged snacks can be sold in betting shops should be removed.
The Gaming Board would have an expanded role, becoming the Gambling Commission. It would have greater powers to check up on casino operators and would extend its influence to the control of bookmaking. Bookmakers, whether companies or individuals, would have to undergo a vigorous 'fit-and-proper' test and would be investigated for competence and knowledge, and for honesty and financial status. This would be more far-reaching than the present investigations by betting licensing committees of applicants for bookmakers' permits.
The commission would also promote and police new money laundering regulations, which would be extended to apply to bookmaking. The present controls restrict the number of casinos and betting shops, and the Gambling Review Body would make its position clear. It argues that worries about operators behaving inappropriately if supply outstrips demand should be controlled by regulation and encouraging competition, not by rationing supply.
The report does acknowledge that complete deregulation carries risks. Consequently, it concludes that there should not be betting in pubs or alcohol in betting shops. In a couple of areas, it proposes greater restrictions than exist at present, and it recommends that gaming machines be banned from cafés and taxi offices and, in amusement arcades, new restrictions on the payouts and staking should be imposed.
Those familiar with the white paper recommendations for reform of liquor licensing law will be surprised to learn that the report proposes that local authorities should have the power to license casinos and betting shops. It envisages that authorities should have the ability to institute a blanket ban on all, or particular types of, gambling premises in a specified area.
No doubt the Government will now embark on a process of consultation. It will be interesting to see whether the proposed changes are implemented in the form proposed, in a modified form, or not at all. Perhaps the safest bet would be the deregulation of some of the outdated restrictions by secondary legislation, thereby avoiding the difficulties and adverse publicity arising from legislating for wholesale deregulation.
Michael Messent, Partner, Trethowans