Out-Law News 4 min. read

Change of policy or to the law needed if Government is serious about curbing use of high stakes gaming machines, says expert

The UK Government would need to change policy or the law if it wants to reduce the use of high-stakes rapid play gaming machines in betting shops, an expert has said.

Gambling law specialist Audrey Ferrie said that the Government would require new primary legislation if it was serious about giving local authorities a greater say in the number of betting shops, and availability of fixed odds betting terminals (FOBTs), in their area.

Ferrie said that alternatively new regulations could be introduced by the Government if it decided it wanted to re-categorise gaming machines. This would allow it to select the premises in which those machines could be used or set the value of prizes available. However, by taking action on the latter the Government would risk contradicting existing policy and draft new legislation it has laid before Parliament, she said.

The expert was commenting after UK Prime Minister David Cameron came under pressure from opponents in the Labour party to take action to address the perceived link between the use of FOBTs and problem gambling. The gambling industry has consistently said that there is no evidence to support such a link.

In Britain, gambling operators wishing to open a betting shop need to obtain both an operating licence from the Gambling Commission and a premises licence from the relevant local authority.

Under the Gambling Act, local authorities are obliged to approach the question of whether to grant a licence from the presumption that a licence should be issued provided the activity is carried out in accordance with a variety of rules and guidelines. They are explicitly prohibited from taking the expected demand for new shops in the area into account when coming to their decision.

A Parliamentary motion to give local authorities new powers to address the issue was raised by Labour last week, although it was defeated in a vote in the House of Commons. In the Commons debate on the motion, Culture Minister Helen Grant said that "changes to the national planning system are not the answer to local problems".

If the Government was to change its position on that issue it would need new primary legislation to do so, Ferrie said.

Once betting operators have obtained a premises licence, they are free to install up to four gaming machines in their shops under the Gambling Act and in accordance with their operating licence. The largest stake that can be placed by players of gaming machines are on category 'B2' machines and these have become widespread within the industry. These FOBTs allow players to place stakes of up to £100 as often as every 20 seconds for the chance to win £500.

The Act gives power to the Government to set new regulations to re-categorise gaming machines and restrict their use in some premises or set the value or nature of prizes that can be won.

However, Ferrie said that the Government had already proposed draft laws that would fix the maximum stakes and payouts that can be placed and generated from 'B2' gaming machines for three years. She said the Government had already decided not to reduce or increase the maximum stakes and payouts for those machines as part of its triennial review of the rates last year, although it also called on industry to provide it with evidence that would support raising the maximum levels in future amidst pressure from campaigners.

The draft Categories of Gaming Machine (Amendment) Regulations 2014 are currently before Parliament. They received the backing of a House of Commons committee in November last year and are now before the House of Lords for scrutiny.

"It would represent something of a U-turn if the Government was to suddenly outline plans to reduce the maximum level stakes and payouts for category B2 gaming machines," Ferrie said.

Ferrie said, though, that the onus is on the gambling industry to continue to rise to the Government's demands to address concerns about problem gambling and avoid new laws being introduced that could impact on their ability to deploy new betting shops or profit from FOBTs.

During the Commons debate last Wednesday, Culture Minister Helen Grant called for the betting industry to introduce "better targeted and more effective player protection for users of gaming machines" by March.

"I am clear that if the betting industry fails to deliver on its commitment to implement enhanced player protection measures by March 2014, does not share data for independent research, and if the balance of the evidence suggests precautionary action on stakes and prizes or other measures are required, the Government will not hesitate to act," Grant said.

Since October, members of the ABB have had to abide by a range of measures designed to ensure responsible gambling and player protection. Under the ABB Code (24-page / 2.14MB PDF), players of gaming machines should be given the opportunity to set their own cash and time limits, and new age-verification measures and rules on the advertising and promotion of gambling were also introduced.

The ABB criticised Labour's Parliamentary motion and said that recent research had shown that the level of problem gambling had fallen 40% and that gambling operators did not target deprived areas in which to set up new shops.

"While you could bet £100 in one go, hardly anyone does," the ABB said in a statement. "The data from betting shop operators and machine manufacturers shows that the average customer plays for about 10-15 minutes and spends only £7.55 which is less than the price of a cinema ticket. The 20 second speed cycle in a betting shop is actually the longest in the world, and is deliberately made that length in order to give players more time to reflect. Betting shop operators are genuinely committed to helping people with problems."

In response to Labour leader Ed Miliband's questions in Parliament, Prime Minister David Cameron said that there are "problems" within the betting and gaming industry that need addressed but suggested that action should only be taken if there is evidence to justify doing so. He said the Government would report in the spring on the progress of a review into gaming machine play that is being conducted at the moment.

Research is currently being undertaken by the charity the Responsible Gambling Trust into people's behaviours when playing gaming machines with high stakes and payouts. A full report is scheduled in the autumn of this year, although an interim report is expected in March. 

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