Briefing Note

Briefing Note for Gambling Bill: House of Lords Second Reading Debate – February 2005 Whilst the Casino Operators’ Association (COA) recognises the need to modernise the 1968 Gaming Act and strengthen legislation to protect children and the vulnerable, it has fundamental concerns that despite changes to the draft Gambling Bill the proposed legislation remains anti competition and offers inadequate safeguards against increased problem gambling, crime and money-laundering. The Casino Operators Association of the UK (COA) represents long-standing casino owner / operators and private companies who believe firmly in controlled expansion of the UK casino industry. Based on our long-term experience, we believe that this legislation carries significant risks and will severely impact on hitherto well-run and controlled UK casino gambling. As a result of widespread public and parliamentary concern, the Government introduced major changes to the legislation in Committee in the House of Commons. These have not addressed the key threats of increased problem gambling and crime & money laundering, and have further undermined the commercial interests of the existing industry. The Government published its new policy on casinos on 16 December 2004. Not only was the industry not consulted on this latest policy, but the House of Commons Standing Committee was given just one day to scrutinise the Government’s subsequent amendments to the Bill which have changed fundamentally substantial parts of the legislation relating to casinos. Our main concerns are set out below, with recommendations which would mitigate some of the potentially damaging social, commercial and economic effects of this legislation. Main Dangers
1.	Problem Gambling
	When the Gambling Bill was first published, Mark Griffiths, Professor of Gambling at Nottingham Trent University estimated that the current figure of around 300,000 problem gamblers in the UK would increase between two and four-fold with the deregulation of the industry. The Government’s recent proposals for a cap on new casinos and a restriction on machine and other entitlements for the existing industry prove that they have still not understood the roots of problem gambling. Small numbers of machines in small, proven existing casinos are not the threat. The proliferation of problem gamblers will be precipitated by the over-concentration of unlimited stakes and prizes machines (designated Category A) in new, vast regional casinos under poorly controlled circumstances.
2.	Crime and money laundering
	‘There is a risk that increasing the opportunities to establish casinos could increase the risk of illegal gambling, criminal infiltration and money laundering into casinos’. (Government’s Regulatory Impact Assessment, September 2004). In particular, “open-house” access to high-level stakes and prizes gaming machines without adequate entry controls would lend itself to abuse. This lack of control would be irresponsible and completely at odds with the anti-money laundering regime which has been put in place by the Treasury, Bank of England, the FSA, and European and other international institutions.
3.	Anti-competitiveness of the Bill
	There are currently 131 casinos, and less than 1,250 casino-based slot machines in the UK altogether. Under the legislation new, regional casinos would be permitted to install up to 1,250 unlimited jackpot Category A machines each, but existing well run casinos would not be permitted any. The Government also proposes to restrict existing casinos to their current entitlement of 10 gaming machines per casino of up to Category B and ban bingo and betting on real or virtual events. New casinos of all sizes will thereby receive a huge competitive advantage from the current draft legislation, crippling the existing industry which is presently well run, well regulated and best placed to introduce and oversee innovations in the casino industry. This is unfair and uncompetitive, will lead to unnecessary loss of jobs and possible legal action. Recommendations
	1.	ID on entry to all new casinos
		The Government has so far resisted cross-party amendments for ID on entry to casinos to be enshrined on the face of the Bill. ID on entry to casinos is vital for three reasons: It is an obvious way to prevent underage gambling in casinos. It is extremely important in order to maintain the UK’s current low levels of problem gambling, as voluntary self-barring schemes operational in many casinos today cannot operate without stringent ID on entry. Most importantly, this measure is essential if the casino industry is to remain free from money-laundering and associated crimes. Casinos must “know” their customers. COA Recommendation: Control of a casino starts at the entry door. ID entry controls to casinos should be mandatory and stringently applied. Each person should have to register on first entry to a casino and provide proof of their identity, age and address. CCTV cameras should be installed to record this process.
	2.	One new regional, one new large and one new small casino per region
		The COA feels that the Government’s proposal of 8 new regional, large and small casinos is an arbitrary and illogical figure. A genuine trial of regional casinos would be less than half this number. However, if the Government wants full-scale new regional casinos, they need to be introduced, as per their title, on a regional basis. This policy should also apply to new small and large casinos to avoid over-concentration of casinos in particular areas. As the Bill is currently drafted all the 24 new casinos of each size could theoretically be placed in the same region. COA Recommendation: Given the size of the trial which the Government is insisting upon, we recommend that there should be a maximum of one new regional, one new large and one new small casino per region – making an evenly distributed maximum of 11 of each of the 3 sizes of casino and a total of 33 new casinos as an absolute maximum. The Regional Planning Bodies should identify potential areas for all new casinos according to strict regeneration criteria. We believe that this regionally based recommendation for all new casinos will guard most successfully against both proliferation and concentration. It is the most defensible logically, the simplest to administer and will cause less damage to the existing industry.
	3.	Equal entitlements for new and existing casinos (existing casinos to be classified correctly)
		The current draft legislation does not integrate the existing industry with new casinos in any way. The COA strongly believes that all new and existing casinos should enjoy a level playing field and equal entitlements, according to their size category, in terms of bingo, betting and machine numbers. (Existing sub-small casinos should qualify for new small casino entitlements). The existing and experienced industry is best placed to manage the Government’s experiment into new casino facilities, and controlled change and expansion across the whole industry is the most effective way to avoid concentration and proliferation. COA Recommendation: The COA seeks equal treatment for all new and existing casinos. There should be equal entitlements to bingo, betting and gaming machines as determined by size category. New Category A machines should be introduced in a controlled and balanced manner in to the UK which is why we advocate only a small percentage of each casino’s machine entitlement, say 20%, to be Category A machines.
This legislation must be even-handed and socially responsible for all in the gaming industry: the operators, regulators and customers alike. To ensure this for the UK casino industry the Government must; • Make ID on entry to casinos a requirement on the face of the Bill • Cap the number of all new casinos logically on a regional basis • Ensure that the entire gambling industry operates on a level playing field Next steps If you intend to speak during the Second Reading Debate in the House of Lords we hope that you will consider bringing the above points to the House’s attention. Should you require further detail or clarification of any issues please contact Phil Lowther, General Secretary of the Casino Operators' Association on 0114 281 6209 or Fax 0114 281 6199 or email coa.generalsecretary@tiscali.co.uk or Lindaatcoa@onetel.com. 15 Livesey Street, Sheffield, S6 2BL Chairman: Andrew M Love General Secretary: Phil Lowther www.casinooperatorsassociation.org.uk Company limited by guarantee Registered Office - 25 City Road, London, EC1Y 1AR Registered in England 4235765