A look into the UK gambling laws.

At your Leisure - 25 October 2004

No Dice: UK Gambling Laws to Change

As the Government publishes its Gambling Bill, this At your Leisure looks into why new gambling laws are needed, the new types of betting that have caused the re-think of the laws and the problems that these new laws and new forms of gambling are likely to produce. The article also gives an overview of the casino entertainment industry as it prepares to take advantage of the opportunities provided by the likely regulatory changes.

Image: Roulette - will we be playing more of this in a few years? Copyright: Jebb Graff, stock.xchng

Background

Gambling is a huge industry in the UK. According to Government figures, there are nearly 9000 licensed betting offices in Great Britain. £3.5 billion was exchanged for 'chips' (gambling counters) in the UK's 122 casinos in 2001/02. Data collected by the gaming industry suggest that it is worth over £63 billion every year. Against the background of rising profits for bookmakers, we take a look into this industry and find reasons for the new legislation.

You can also view the UK Gambling Laws as a Mind Map.

When the odds are fixed

Fixed Odds Betting Terminals (FOBTs) are one of the main new ways in which people gamble for leisure purposes. The following outline provides more information on these FOBT machines:

• They look like the quiz machines that are found in pubs and clubs
• They offer a number of games, the most popular of which is roulette
• They are increasingly located in betting shops
• They make casino-type games available on the high street
• Their maximum payout of £500 for roulette far exceeds 'fruit machine' rewards
• Many betting shops report greater revenue from FOBTs than from traditional over-the-counter gambling

The need for new regulation

The Gambling Bill continues this Government's avowed commitment to modernising Britain. It is the first new gambling law since the 1960s. The growth of bookies' business in the area of FOBTs, suggests that regulation hasn't kept up with the reality of modern gambling activities. An overhaul of the rules governing betting is necessary, say the Government, due to the following:

• Social acceptance of gambling (two out of three people 'play' Lottery games)
• Gambling is now regarded as a leisure activity
• Technological change has transformed the ways in which information can be processed, visually represented and communicated. Rules from the 1960s simply are not relevant
• UK business is prevented from competing with overseas operators of Internet-based gaming sites
• There is no proper protection of vulnerable people and no guarantee of high standards of social responsibility

Do you feel lucky? Gambling laws set to change. © Dreamtime

What will the bill do?

The Government's main proposals are as follows:

• Provide 24 hour access to gambling through super-casinos based on 'resorts' that offer sports and other leisure activities
• Up to 1,250 American-style slot machines in each resort
• Unrestricted access to casinos for non-members
• Remove slot machines from around 6,000 fast food outlets and taxi offices
• The creation of a new regulator - the Gambling Commission

Image: Slot machines - we may be seeing as many as 1,250 of these in each American-style resort. Copyright: Phil Landowski, stock.xchng

The Gambling Commission will be charged with the following responsibilities:

• Preventing gambling being the source of crime or disorder
• Ensuring that gambling is conducted in a fair and open way
• Protecting children and other vulnerable people

These proposals were added to after being scrutinised at the Bill's draft stage by a joint committee of MPs. These MPs wanted to prevent too many of these casinos being set up. Their answer was to permit only very large developments going ahead. This seems to have cleared the way for the creation of huge leisure destinations in the UK's major towns and cities.

Are leisure companies ready to invest?

You bet, they are!

In a clear example of how private enterprise can take its signals from changes planned in the public sector, the following entertainment and leisure companies have revealed plans for the following investments:

• MGM Mirage plans to spend in excess of £1 billion in the UK on casinos and entertainment complexes
• Caesar's Entertainments plans to invest £335 million on a huge gambling and entertainment resort in Wembley, London
• The owners of Sun City, the leisure complex in South Africa, known in the apartheid era as a venue that many musicians and entertainers refused to play in protest, plan to create resort-type casinos in Manchester, Glasgow and at the Millennium Dome in London
• Las Vegas Sands plans to spend £210 million on casinos in Glasgow, Sheffield and West Ham, London
• Isle of Capri, another Las Vegas-based leisure firm may invest £350 million on UK complexes

Image: The MGM Grand Casino in Las Vegas - coming soon to a town near you? Copyright: Roque Corona, stock.xchng

Domestic companies such as Gala, a UK bingo operator, and Rank Leisure are also expected to invest heavily. Of course, this massive investment is dependent on the Gambling Bill becoming law, but these companies are ready and willing to ride the opportunity that this new regulatory framework will provide. Indeed, analysts Ernst and Young forecast that by 2014, casino developments in the UK may be worth as much as £5 billion.

The casino operators have drawn up plans that add on to existing leisure facilities, creating a multi-themed experience with benefits for consumers and existing businesses alike. Their strategies have football clubs as the hub of the new leisure experience, with casinos being built on land next to the clubs' stadia. Football clubs are looking to 'sweat their assets' more intensively and have the space and expertise of catering for large numbers of customers.

Football stadia are often located in inner city areas, where job vacancies might be expected to be filled rapidly. There is a pool of relatively cheap labour nearby. The boost to regeneration provided by the leisure development may well encourage the planning authorities to grant permission to the projects. Football fans are fiercely loyal to their club; casino operators hope that additional leisure facilities on the site may be regarded with similar emotional attachment.

Leeds United is the latest club to be associated with a casino operator. In addition to the plans for a huge casino and leisure development next to the new Wembley Stadium, projects are also in the pipeline at Newcastle United, Sheffield United, Glasgow Rangers, West Ham United and Manchester City.

The case of Leeds is notable as it involves the sale of land adjacent to its stadium. Leeds have been trying to cut their debts, which had risen to more than £100 million. Its efforts to reduce this burden have necessitated the land sale. Other clubs have not had to sell land, though, preferring to license the use of the asset by the leisure operator. As a result, these clubs will share at least part of the revenues generated by the new leisure facilities. Leeds United will not be able to do this.

Who stands to gain?

Well, naturally, the leisure companies who are willing to commit such large investment sums will benefit from the profits that they expect would be generated by this new breed of entertainment complex. One of the operators mentioned above, Isle of Capri, makes this abundantly clear. Its executive vice-president, Allan Solomon was quoted in the Guardian, justifying his firm's outlay as worthwhile by saying:

'Britain is the most attractive destination at the moment. We like the work ethic and the British people have a much greater propensity to gamble than in the United States.'

The success of the National Lottery seems to provide some support for this view. But if there wasn't a Lottery, would people gamble so much? There's considerable evidence that the lottery has shifted people's spending on games of chance from the local to the national level. Many charities and community sports groups complain that their revenues have fallen drastically since the Lottery's introduction.

Image: The introduction of the Lottery may have paved the way for the new casinos as gambling becomes more socially acceptable. Copyright: Andy Culpin, stock.xchng

The other main beneficiary is likely to be the Government itself, which stands to gain significantly increased tax revenue from spending on gambling and from the profits of leisure operators. Some observers are concerned that these large anticipated tax receipts are driving the change in the regulatory framework, at the expense of a concern for the nation's health and welfare. Chief amongst their fears is a rise in gambling related problems such as addiction, indebtedness and family breakdown.

What's the likelihood of this happening?

Let's look at the differences between playing a slot (or 'fruit') machine and playing one of the current FOBTs mentioned earlier:

Slot Machine	FOBT
Insert money (£1 or £2 coins) into slot	Use a debit card over the counter (can deposit over £100)
There's a fixed stake	Player chooses initial stake
Press 'Start' button	Touch screen to select gamble, such as 'red or black' or 'odd or even'
Each spool spins then stops	Roulette wheel spins for about 15 seconds before stopping
Bank or take winnings by pressing 'collect' or 'bank'	No money taken directly from machine. Get ticket printed with remaining credit. Take this to counter to collect any winnings

Would this encourage you to gamble more or less? Perhaps the machine operator wants you to gamble until you run out of money?

In March 2004, the Association of British Bookmakers introduced a Code of Practice to limit the number of terminals in any betting office to four machines. The code also demands that every terminal has a 'help' screen, providing details of who to contact in the event of the player losing control of their gambling. GamCare is a UK group set up to protect gamblers and to offer support to players who need help.

GamCare's Web site offers the following advice to players of gaming machines such as FOBTs:

• You're buying fun, not investing your money
• Before playing, set strict limits on how much time and money you're going to spend
• Quit while you're ahead
• Only gamble with money you can afford to lose
• Don't spend more money on gambling with the hope to win back money that you have lost
• Keep up other interests and hobbies - don't let gambling take over your life
• Don't gamble in order to escape from stress or boredom

Above all, if you can't afford to lose; don't play!

Source: GamCare Web site

Any chance of the Bill not becoming law?

If some MPs have their way, this could be an excellent illustration of how the political system can place brakes on the executive's decision-making ability. Many backbench Labour MPs are understood to be very concerned that gambling addiction could become a big social problem in the UK.

With the gambling industry already acknowledging that a rise in levels of addiction is inevitable, this could be another political test for the Government. Some serious questions remain:

• Does the Gambling Bill really help the UK to adapt to the modern world?
• Or is it actually an open chequebook for the companies which stand to profit most from its effects?
• Does the Government really believe that this Bill will help Britain change for the better?
• Is a new world of gambling really just a new 'cash cow' for the Government?
• How will we pick up the pieces of a society where addiction to gambling is the norm?

Image: The famous 'Welcome to Las Vegas' sign - the home of casinos. Will pressure on the Government prevent a UK version of the town? Copyright: Kate L., stock.xchng

Sources of further information

• Department for Culture, Media and Sport - 'Gambling and Racing' section (http://www.culture.gov.uk/what_we_do/Gambling_racing/)
• Gambling shakeup to allow mega-casinos - from the Guardian (http://politics.guardian.co.uk/homeaffairs/story/0,11026,1330779,00.html)
• Gambling law shake-up is unveiled - from the BBC (http://news.bbc.co.uk/1/hi/uk_politics/3754960.stm)
• Caesars plans vast Wembley casino - from the BBC (http://news.bbc.co.uk/1/hi/business/3735546.stm)
• £260m leisure site plan unveiled - from the BBC (http://news.bbc.co.uk/1/hi/england/manchester/3874717.stm)
• Problem gambling 'set to explode' - from the BBC (http://news.bbc.co.uk/1/hi/sci/tech/3641512.stm)