U.K. casino operators are asking Parliament to review the 2005 Gambling Act with an eye to creating a level playing field across the gaming industry.
The National Casino Industry Forum presented its case before the House of Commons Culture, Media and Sports Committee on October 18. The face-to-face was in conjunction with the NCIF submission of its report titled “The Economics of the U.K. Casino Industry.”
Roy Ramm, director of NCIF and compliance and risk management director at London Clubs International, told the committee that casinos were initially at the top of a “pyramid of regulation” when the act was being debated.
However, said Ramm, “One of the main messages that we wish to get across to the committee this morning is that we kind of feel that pyramid has been inverted to some degree and the act has not delivered what it should have.”
Ramm believes there needs to be reconsideration by Parliament of the gaming industry as a whole.
“There are 248,000 slot machines in the U.K.,” said Ramm. “Less than 1 percent of them are in British casinos. And there is a lack of differential now between the products that we offer in casinos and in other gaming establishments.”
Peter Brooks, NCIF member and president of Genting U.K., said, “The Gambling Act has undoubtedly given the casinos some positives, but in the overall picture, it has failed to do two things for us.
“One, as Roy has said, it has inverted the pyramid between the highest levels of responsibility and security from a supervision and access perspective with the highest level of gaming product.
“The other thing it has done is created a two-track process. You have the new casinos that are capable of being created under the 2005 act… and the 1968 act original casinos, of which there are over 140 today, which are kind of frozen in aspic.”
Brooks noted that none of the 2005 act casinos has yet opened. And the NCIF believes that the so-called “small” casinos under that legislation are not commercially viable.
A small casino can have up to 80 slot machines, but must operate one gaming table for each two slots. A large casino under the 2005 regulations can have up to 150 slots but must operate one table for every five slots. Eight casino licenses of each type have been authorized, but not all have received bids from operators.
A commission member questioned the importance of slots to casinos, pointing out that slots represent only 15 percent of the existing casinos’ profit. Brooks agreed that is the current situation, but only because the casinos operating under 1968 act regulations are permitted only 20 slots of the type allowed in 2005 act properties.
Simon Thomas, chairman of Hippodrome Casino, told the committee that increased revenue from enhanced slot operations would allow casinos to compete for the gaming and leisure business.
“The large and small casinos would have a much more international style of operation,” said Thomas. “They would have more bars and restaurants. When you look at the American examples, I think 60 percent of revenue is non-gaming. It’s all contribution to the overall business. It’s all part of it.”
Brooks, in his closing comment to the committee, said of the 2005 act, “During the debate of the bill, approximately 70 percent of the time was devoted to debate about casinos. Casinos are by revenues about 11 percent of the gambling industry. So it was massively out of proportion. And out of that time an enormous amount of time was spent on regional casinos.”