Gambling legislation costing exchequer £30 million every year
IEA launches new web paper
Embargoed until 00:01 Tuesday 11 September 2012
The exchequer is missing out on more than £30 million each year in gaming duty alone due to anachronistic gambling legislation. A new report, Seven Years Later – Casinos in the aftermath of the 2005 Gambling Act, finds that current legislation unnecessarily hinders British casinos and that modest reform would bring significant benefits.
It suggests that the law should allow casino operators to adapt to consumer demand and that the government should allow local authorities to use existing licences which would create much needed jobs and investment. It is unreasonable that many large towns are still unable to open casinos regardless of public demand. The current distribution of casinos is completely arbitrary and unfair on certain regions. Logical reform is necessary. Specifically:
Legislation is outdated and it is perverse that many Britons do not have access to ‘the safest place to gamble’ and that those who do are not able to play games available in other venues, on their mobile phone and on the internet. There is no obvious reason why a reasonably sized town or city should not be able to host at least one small casino. There were 186 licences created under the 1968 Gaming Act. These can only be used in permitted areas determined at the time based on population size.
Although populations have increased markedly over the last 50 years these licenses cannot be transferred to towns that at the time were deemed too small. Consequently, 41 of these licences are currently dormant. 16 new licences were created in 2005 but these are also confined to specified towns and in some cases there is not enough demand in a specified locality for a new casino. Seven years after the legislation was passed, only one of these new casinos has been built.
Considerable economic benefits would be derived from the modest reforms needed to put these dormant licences to use. An average casino generates between 120 and 150 jobs and each unused casino license could generate £600,000 per annum in gaming duty. With more than fifty licences currently unused, the Treasury is potentially waiving in excess of £30 million.
Allow transfer of licences
Councillors in places such as Swindon, Peterborough and Bognor Regis have expressed interest in applying for casino licences but are unable to do so under current rules. The government should abolish the permitted areas rule and allow unused licences to be transferred between regions. This would allow the building of casinos in areas where they are wanted and would bring substantial economic benefits. Companies wishing to build casinos would still have to obtain planning permission, get signed-off by the Gambling Commission and go through the local authority.
Permit a wider range of activities in casinos
Casinos are the most heavily regulated area of the industry and so it makes little sense to outlaw gambling activities which are available in ‘soft’ gambling venues. This should be reflected in the stakes, prizes and range of gambling activities available. British casino operators should be allowed to offer a wider range of products such as horse racing and online gambling from within casinos.
Commenting on the report, its author, Christopher Snowdon, said:
“The last government pulled back from liberalising the casino industry at the eleventh hour, leaving casinos hampered by archaic rules that were drafted in the 1960s. More than a quarter of the 200 casino licenses lie dormant and only one of the 16 new casinos licensed in the 2005 Act has been built. Most will never be built because of bizarre planning restrictions which allow small towns like Stranraer to have a casino while places such as Croydon, Swindon and Bognor Regis cannot. With many seaside towns struggling and casinos a potential economic lifeline this is lunacy.
“While online gambling and bookmaking flourishes, casinos have been hindered by high taxes and petty regulations. With hindsight, the politicians who drafted the legislation admit that it was flawed. After seven years of inaction, it’s time for these mistakes to be corrected so that any reasonably sized town or city can host at least one small casino if the demand exists.”
Notes to editors
To arrange an interview about the publication please contact Stephanie Lis, Director of Communications: 020 7799 8909, [email protected]
The full report, Seven Years Later – Casinos in the aftermath of the 2005 Gambling Act, by Christopher Snowdon, can be downloaded here.
The mission of the Institute of Economic Affairs is to improve understanding of the fundamental institutions of a free society by analysing and expounding the role of markets in solving economic and social problems. The IEA is a registered educational charity and independent of all political parties.