11/04/2004
Yesterday the Committee published its report. Overall the Committee was supportive of the DCMS"s aims; there had been a number of industry rumours that the Committee had taken a very negative line. However, there were a number of important points/recommendations which we highlight below. Moreover, along with the Committee"s recommendation that its proposals are adopted, it urges the Government to pass the Bill without delay and in particular not to "drop this Bill because it perceives it to be difficult".
Exchanges are singled out even in the introductory paragraphs of the press notice. A ban on exchanges is not favoured but instead an obligation on those who "lay bets to earn a living" to be registered with the Gambling Commission. The Committee recommends that perhaps the DCMS and the exchanges should agree a ceiling of "recreational" laying and that all transactions over a certain amount be reported. Welcome is the fact that they acknowledge that the audit trail produced by the exchanges is superior to ordinary bookmakers, something which has been highlighted in the recent high profile advertising campaigns. They anticipate, however, that certain additional reporting requirements may be required by the Inland Revenue. Given the Committee"s commitment to a single regulator, it is hoped that this does not create a system of dual regulation.
- Whilst the Committee endorses the view that the National Lottery and spread betting are regulated solely by their respective regulatory bodies (the National Lottery Commission and the FSA respectively), the Committee also recommends that this is kept under review, and suggests a time frame of 5 years (rather than review at the time of Royal Assent) for spread betting and 2 years for the National Lottery.
- The Committee is critical of the fact that a paving bill to set up the Gambling Commission was not implemented to allow the Gambling Commission to start on its considerable tasks immediately. The Committee instead exhorts the Government to pass the Bill as soon as possible adding "there is no reason why the Gambling Bill should not be introduced in the current session of Parliament".
- The Committee recommends that operating licences should like premises licences be indefinite in duration. This will be welcomed by operators who were puzzled by the apparent anomaly, particularly given the control over day-to-day matters by the Gambling Commission. (It endorses, for example, the Gambling Commission"s power to fine on an unlimited basis which will keep operators in check.)
- The Commission ultimately endorses the Local Authorities" retaining power over premises licences but acknowledges the need to educate and prepare the authorities for their enhanced role. The Committee accepts too the current tension between planning and the proposed powers of the Local Authorities for premises licences. Ultimately, however, it accepts that the "demand" test can be maintained at a planning level because it is right that "proliferation" can be stemmed at a local level. In addition, it is concerned that:
Key policy decisions with regard to the siting of resort casinos have yet to be addressed. An announcement is expected in the summer, and in particular a decision on the size which will trigger regeneration issues. The Committee is firmly of the view that resort casinos should be tied to regeneration, and emphasises the fact that the terms "large" and "resort" casinos have been used interchangeably by the DCMS whereas they are two different products. This again was a point made by a number of operators.
- Unless the ODPM and DCMS work together to iron out inconsistencies in the planning/premises licence regime an operator will be subject to double jeopardy, a point that has been consistently made by operators since the Bill was published.
- Unless the premises licence regime is introduced at the earliest opportunity, new premises licences will continue to be granted which will be inconsistent to the proposed regime, including the regeneration criteria.
- On advertising it is welcome that the Committee has recognised that a health warning akin to tobacco advertising is not warranted. It is good too that (particularly important in the context of online products) the Commission recommends a ban on advertising by all non EEC operators unless the Gambling Commission determines that the location of the particular operator carries an acceptable level of licensing. The Commission at least recognises that the DCMS"s current proposal would make the UK a "less attractive destination for remote gambling operators" (i.e. reverse of the above where all advertising would be permitted unless banned).
- The biggest changes recommended by the Commission came in relation to gaming machines where it does not endorse the proposal of allowing unlimited machines in large casinos. Moreover, it defines small casinos as having a minimum table (our emphasis) gaming area of 5,000 sq ft as distinct from gaming area. This would have a substantial impact on the overall size of a casino. It endorses, however, the 3:1 ratio of tables and machines which it acknowledges will disappoint some operators. However, the real sting comes with those casinos with over 10,000 sq ft "table" gaming space. The Committee recommend limiting such casinos to only 41 machines. This will certainly be a blow to many operators given that it has long been the case that the majority of revenue comes from tables. It even recommends that the Gambling Commission reduces the number of machines on site if the tables are not being used. The Committee recommends that with resort casinos there may be a discretion to increase machines to 1,000 or 1,250 but again reiterates that resort casinos be linked to regeneration plans. The ban on jackport linking is endorsed but this is to be reviewed.
- Large casinos will, if the Committee"s recommendations are accepted, have to provide leisure and cultural facilities ancillary to gambling. One can only speculate what the Committee had in mind with regard to the latter; it is doubtful that a UK operator would have an art collection to rival his Las Vegas peers! It also recommends that "planning gains" be obtained from all large casinos as part of the planning process.
- Interesting too that the Committee recommend that a non smoking policy may become part of a licensing term for casinos with no mention of betting offices where, given their size, they are bound to present more of a problem for the "passive smoking" problem identified by the Commission.
- The Committee have also recommended that small casinos should not be permitted to have bingo if the Local Authority wish to ban it, likewise with betting. "Small" is still a substantial facility compared to the current casinos and it is most unfortunate that the Committee has sought to resile from one of the chief tenets of the Budd recommendations.
- However it is good news that the Committee suggests that remote gambling licensing is introduced as soon as possible as well as the fact that software suppliers also be licensed, something about which the major players have been very vocal. Although the Committee accepts the proposal that certain jurisdictions can be "banned" so that the remote gambling operator may not take wagers from that territory, it agrees that this should be an extreme step and only one which could be taken after full parliamentary scrutiny before both houses. The Committee also recommends that vetting under aged play should be a joint responsibility between banks and operators recognising the crucial role that banks play in the online gambling regime.
Overall the recommendations are disappointing in several respects and we are concerned that the greater goals of deregulation (i.e. the freedom of choice by the customer and the recognition that gambling is a mainstream leisure activity) may get lost by the consistent lobbying of operators only concerned to protect their existing businesses and their planned expansion in the UK.
Hilary Stewart-Jones
Berwin Leighton Paisner
Adelaide House
London Bridge
London EC4R 9HA
England
DX 92 London/Chancery Lane
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