Casinos (Gaming Machines and Mandatory Conditions) Regulations 2025
(Limited Text - Ministerial Extracts only)
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Baroness Twycross
That the Grand Committee do consider the Casinos (Gaming Machines and Mandatory Conditions) Regulations 2025.
Relevant document: 27th Report from the Secondary Legislation Scrutiny Committee
The Parliamentary Under-Secretary of State, Department for Culture, Media and Sport (Baroness Twycross) (Lab)
My Lords, I am pleased to speak to these regulations, which were laid before the House in draft on 12 May. This instrument has been considered by the Secondary Legislation Scrutiny Committee and was not drawn to the special attention of the House. It is part of a package of statutory instruments that, together, make a number of changes to the legislative framework for land-based casinos.
If these regulations are approved by both Houses, I intend to sign two related statutory instruments that follow the negative procedure: the Gambling Act 2005 (Commencement No. 6 and Transitional Provisions) (Amendment) Order 2025 and the Gambling Act 2005 (Premises Licences and Provisional Statements) (Amendment) (England and Wales) Regulations 2025. The former extends existing casino entitlements, and the regulations we are debating today introduce protections—equivalent to those for 2005 Act casinos—for converted casino premises as a result of the extended entitlements.
The premises licences and provisional statements regulations amend existing procedures so that a converted casino operator can apply to its licensing authority to vary its premises licence to enable it to exercise the extended entitlement. We published the negative instruments in draft on 12 May, the same day that these regulations were laid, to provide transparency about the range of changes we are proposing and to allow for proper scrutiny. None of the interconnected legislative instruments will be made unless the protections in these regulations are approved by Parliament.
The Government are focused on economic growth. I believe that enabling a responsible gambling sector to grow is compatible with creating an even safer one. We have already brought forward measures to improve consumer protections, including the introduction of stake limits for online slot games and establishing a statutory levy on gambling operators, to fund the research, prevention and treatment of gambling-related harms. Our manifesto also committed to working with industry to ensure responsible gambling, and we acknowledge the difficulties that land-based gambling businesses, particularly casinos, have faced since the Covid-19 pandemic. Therefore, following a consideration of the best available evidence, we intend to proceed with a series of reforms for the land-based casino sector.
Since being appointed, I have visited casinos and witnessed the contributions that they bring, with jobs, tax revenues and support for the night-time economy. The casino sector directly employs around 10,000 people, with many in non-gambling roles such as hospitality. Venues are often steeped in history and feature bars, restaurants and, in some cases, theatres. The sector generates £866 million in gross gambling yield each year, with up to 50% of this paid in gaming duty. We intend to implement measures that are estimated to increase this GGY figure by £53 million to £58 million.
Many of the restrictions that apply to land-based casinos derive from legislation that had not envisaged the rise of online gambling. In light of this, restrictions on product availability in casinos are now less important for protecting customers than factors such as the design of products and the quality of monitoring. We therefore intend to change the restrictions that apply to the supply of some products, giving casinos greater freedom about what they offer customers. None of this will be at the expense of protecting customers from gambling-related harm.
There are two types of casino licence. The first is for those who were already operating when the Gambling Act 2005 came into force, which I will refer to as “converted casinos”. The second are those created by that Act. The Act created two types of casino within this licence category, which I will refer to as “small casinos” and “large casinos”. Converted casinos are generally allowed only 20 gaming machines, or at least one is a category B machine, regardless of their size. This compares to up to 80 machines for small casinos and 150 for large casinos.
To support the sector, this package will give converted casinos the option of having the same gaming machine allowance as small casinos. For converted casinos with a gambling area that is smaller than the minimum required for a small casino—500 square metres—a sliding scale will apply for gaming machine allowances commensurate with their size. This will more closely align the rules for all casinos.
Converted casinos will have to abide by a number of strict conditions in order to increase the number of machines they offer. If they wish to site 80 gaming machines, they will need to meet the same size requirements as small casinos. This means that they must have a gambling area of at least 500 square metres, a non-gambling area of at least 250 square metres and a table gaming area of at least 250 square metres. They will become subject to a maximum machine-to-table ratio, meaning the number of machines in the casino cannot be more than five times the number of tables available for use. An additional protection prevents these casinos from siting more than 80 machines within casino premises that are connected to each other. Smaller converted casinos will be allowed to increase their gaming machine entitlement depending on their size. Their table gaming and non-gambling areas will need to be at least half the size of their gambling area.
These rules are vital to ensure that customers are offered a mixture of gambling and non-gambling opportunities when they visit a casino. The strict requirements on how much space can be allocated to each activity will mean that, even with an increase in the number of machines, casinos will not be overwhelmed with an electronic offering. This instrument also introduces a maximum gambling area for converted casinos. In allowing converted casinos a similar entitlement to small casinos, it is fair and consistent that they are subject to similar restrictions. Therefore, all converted casino premises will be limited to a maximum gambling area of less than 1,500 square metres, matching the maximum gambling area allowed for small casinos. However, a conditional exemption is made for casinos that currently operate with a gambling area of 1,500 square metres or more.
This package of instruments will also allow betting to take place in all converted casinos. The current regulatory framework prohibits these casinos from offering betting products, whereas venues licensed under the 2005 Act can do so. The prohibition makes little sense, as a casino customer can place a bet on their mobile phone while in the venue but not with the casino itself. This change will allow converted casinos not only to offer a new gambling product but to invest in other parts of their venues, such as sports bars. A limit would be put on the number of separate betting positions or self-service betting terminals that can be offered by the casino.
Finally, I draw the Grand Committee’s attention to two changes that this instrument will make to small casinos. They are currently required to comply with a maximum machine-to-table ratio of 2:1, whereby for every table in use, the casino is permitted to offer a maximum of two gaming machines. This ratio will be updated from 2:1 to 5:1, to align small casinos with large ones and to prevent operators from having to provide tables for which there is no customer demand. Small casinos are also currently required to have a minimum table gaming area of 500 square metres; as a result of these regulations, this requirement will change to 250 square metres. This will amend an anomaly whereby the minimum gambling area and minimum table gaming area were required to be of the same size.
This is a sensible package of measures that will update the outdated restrictions that currently apply to land-based casinos. It strikes the right balance between supporting the sector to grow, while still ensuring that those who visit these venues will be protected from gambling-related harm. I beg to move.
Lord Bourne of Aberystwyth (Con)
My Lords, first, I thank the Minister for setting out what is, in many ways, a very technical SI, as well as the two related SIs to which she referred.
I understand that a lot of the pressure and motivation —if not the only motivation—behind this measure is economic growth and the international competitiveness dimension. However, I certainly had some concerns on reading through the SI. Perhaps I am unique in this —I do not know—but it seems to me that the regulations would potentially alter the split between gaming machines and table-based gaming, which I think the Minister referred to, from 2:1 to 5:1. That is quite a considerable shift. The latter form, table-based gaming, represents a less intense gaming experience and is, I would argue, potentially less harmful to consumers. The Minister will know that 25% of casinos in this country are in the poorest decile of the country; we should therefore be concerned about the connection with gambling harm. Has there been a corresponding increase in space and opportunities for customers to take a break from gambling? There has been an increase in the space available for gambling machines. If there has been an increase in the areas for non-gambling, what is that increase, and what sort of facilities do these areas represent?
It is very clear in the analysis and the evidence that the annual increase in income for the gambling sector after three years is between £52 million and £63 million per annum—the gross gambling yield, I should say—with a median figure of £58 million. I recognise that that is obviously subject to costs and tax, but it still represents a considerable increase. Should we not at the same time be increasing the amount that is put aside to help with gambling addiction and gambling harm? There is no indication of that happening here in the measure.
If one looks at the theme of the analysis and the evidence, which I have done, it is quite clear. Page 4 of the impact assessment states:
“There is a risk that this measure increases the prevalence of gambling-related harm”.
Page 37 states that
“there is a risk that gambling harm will increase with the implementation of this measure”.
That is my concern: we should be doing something about that. I am not against the measure as such. Clearly, economic growth is desirable, but should we not at the same time be concerned about gambling harm, which it is quite clearly an ill in society, including in some of the poorest communities of the country?
Lord Parkinson of Whitley Bay (Con)
My Lords, the noble Lord, Lord Foster of Bath, is right: nothing catches the eye in an impact assessment like a redaction, and there are a number of them in this assessment. I know that some of the information will of course be commercially sensitive, but, if we are to have evidence-led policy, it is important that we can share as much as possible. I look forward to what the Minister has to say about the reasons for the redactions that have been made here.
We on this side of the Committee remain broadly committed to a regulatory framework for gambling that seeks to strike the right balance between addressing harm, upholding consumer protections and recognising the significant role that land-based casinos play in the UK’s leisure and hospitality economy, in the ways that the Minister outlined in her opening speech. We support the principle of reforming the rules governing casinos to reflect changes in technology, consumer behaviour and market pressures, which have been seen over the past two decades.
The proposals contained in this statutory instrument are, as the policy rationale section of the Explanatory Notes makes clear, grounded in the gambling White Paper, which was published by the previous Government in 2023. That White Paper acknowledged the outdated nature of land-based regulation and set out a number of sensible, evidence-led proposals, including changes to the machine-to-table ratio, adjustments to minimum casino floor space and lifting restrictions on in-casino betting. A consultation followed and, in May last year, the previous Conservative Government confirmed their intention to implement these modernising reforms.
The regulations before the Committee today follow directly from that process, so we welcome the fact that the Government have brought them before us. They aim to provide much-needed flexibility to land-based casinos, which have been hit particularly hard by rising operational costs and the impact of the pandemic, in contrast to the growth seen in the online gambling sector. We recognise that a standardised 5:1 gaming machine-to-table ratio, applied fairly across casinos regulated under both the 1968 Act and the 2005 Act, is a proportionate change.
We also support the reduction in minimum table gaming space for small casinos to 250 square metres, which will bring consistency and allow smaller venues to remain viable. Permitting all casinos to offer betting, subject to proportionate safeguards, also aligns the land-based sector more closely with online operators, as the Minister said. So these changes reflect much of what operators have long called for: a level playing field across the different licensing regimes, as well as the ability to offer a wider mix of products and experiences to their customers.
While we support these parts of the reforms, we note that the Government are largely following through on decisions that flowed from the White Paper in the previous Parliament. What is needed now is a clearer vision of how the Government will support the land-based sector going forward, particularly in the face of sustained inflationary pressures; increased taxation, including the rises in national insurance contributions; and rising regulatory compliance costs. We continue to have concerns about the rise of the gambling black market and urge the Minister to do all she can to ensure that her colleagues at His Majesty’s Treasury do not proceed with their tax hike, which we think will hurt bingo halls and much-loved sports across the UK and could fuel the dangers of the black market.
We remain clear that any regulation must be accompanied by rigorous safeguards. As my noble friend Lord Bourne of Aberystwyth and the noble Lord, Lord Foster of Bath, made clear, gambling is never without risk of harm. The land-based sector may not present the same immediacy of risk as online gambling, but the need for effective harm prevention measures remains in this form of gambling as it does elsewhere. The statutory levy, the requirement for casinos to maintain non-gambling areas and the obligations to monitor and intervene with customers who are at risk must be properly enforced. We would welcome assurances from the Minister on how those safeguards might be monitored and what role the Gambling Commission will play in doing that.
I thank the Minister for her very clear introduction to these statutory instruments. I have four questions for her. First, how will the Government ensure that the Gambling Commission is adequately resourced and empowered to enforce the new machine-to-table ratio and the betting provisions across all forms of casinos? Secondly, given the significant transition costs outlined, what specific support or guidance will be offered to smaller and medium-sized casinos to help them adapt to these reforms without risking closures or job losses?
Thirdly, what mechanisms will be put in place to evaluate the impact of these reforms on gambling-related harm and the sustainability of the sector, and when might we expect the first published review? Fourthly, and finally, can she clarify why the Government are taking a different approach to machine reforms in adult gaming centres? I am sure that she is aware of the widespread concerns raised in that part of the sector.
While we support the objectives of these regulations, which rightly aim to bring greater coherence and modernisation to the regulation of land-based casinos, these changes must be the start of a broader, evidence-led strategy for growth, investment and safer gambling. We will continue to press the Government to deliver on that ambition and to ensure that the sector remains sustainable and socially responsible.
Baroness Twycross (Lab)
This has been an interesting debate, and I am grateful to all noble Lords for their insightful contributions. It is clear from today’s discussion that all noble Lords share the Government’s intention of and commitment to protecting the British public from gambling-related harm. I am keen to do that while ensuring that those who wish to gamble can continue to do so safely and have protections around them to enable them to do so. As outlined, these changes will modernise the regulatory framework for land-based casinos and allow the sector to grow while still protecting its customers.
I turn now to specific points raised about the instrument. The noble Lords, Lord Bourne of Aberystwyth and Lord Foster of Bath, raised concerns around gambling harm. Casinos are a highly regulated environment. They have a significant amount of player supervision alongside a number of protections on gaming machines themselves. Importantly, this instrument contains a number of protections that will ensure that customers will continue to be offered a range of gambling and non-gambling opportunities that help to reduce the risk of harm.
Casinos will be allowed to increase the number of machines they offer only if they meet a number of strict requirements. Operators will have to submit an application to vary their licence to their licensing authority, setting out how they meet these conditions and enclosing a new plan. The licensing authority will have to approve this application before more machines can be offered.
The noble Lord, Lord Foster, raised concerns about dormant licences. As noble Lords will be aware, there is only a limited number of casino licences. Converted casinos can move only within their permitted area and instances of relocation are very rare. Stakeholder engagement suggests there is highly unlikely to be a significant increase in the number of these licences that are revisited. The 2005 Act casinos cannot move from the location that their licence granted them. Therefore, no new casino licences will be granted as part of this process.
Lord Foster of Bath (LD)
I may have got this wrong and I would be grateful if the Minister can put me right. My understanding is that there are 42 currently dormant casino premises licences, which would enable 42 casinos to open. This is not about a casino that exists moving to another location; I am well aware of the rules around that. My simple question was: what prevents them opening under this new, perhaps brighter economic climate that the Government are now providing to casinos?
Baroness Twycross (Lab)
It is a licence rather than the premises that cannot be moved. My understanding is that a licence cannot be moved out of the local authority area.
Lord Foster of Bath (LD)
I know that. I apologise for pursuing this but perhaps the Minister will agree to write to me about it. It seems important. I am not talking about casinos moving their licence to somewhere else. They have a licence. They are already allowed to operate within a particular local authority, where its gambling policy allows casinos to do that. There are 42 of those licences outstanding, as I understand it—those are 2020 figures. How are we going to prevent them opening under this new, brighter economic climate for casinos?
Baroness Twycross (Lab)
This may be where the noble Lord and I diverge in opinion, because the Government’s view is that the casino sector is one of the most well-controlled environments in the sector. There are clear restrictions on the licences. As the noble Lord is aware, there are 186 converted licences, with over 130 in use. They are allocated to permitted areas and cannot move to new areas. No new converted licences will be created. Our stakeholder engagement and analysis suggests there will not be a significant increase. As the noble Lord indicated, there may be some increase if people think that these licences are more profitable but, as noble Lords would perhaps describe it, this is one of the more regulated parts of the sector. It is not necessarily, in our view, a bad thing that the sector is seen as more profitable to those people who have casinos. I am happy to write; I am not sure I will be able to give a different answer but we will look into that and I will revert to the noble Lord in due course.
The noble Lord, Lord Parkinson, raised a number of questions. On how these measures will be enforced, the Gambling Commission will work together with local authorities on enforcement and licensing applications. There is no requirement for any casino to take up these entitlements. DCMS and the Gambling Commission have jointly commissioned an evaluation of the gambling White Paper measures, and we published the plans for evaluation last year. I will draw those plans to the noble Lord’s attention; we can write to him on that.
The noble Lords, Lord Parkinson and Lord Foster, raised—potentially from slightly different perspectives—the issue of adult gaming centres. There were a number of measures in the gambling White Paper in relation to this. We recently set out, in a letter to industry that followed these casino reforms, that we will look at ways of supporting the bingo sector and family entertainment centres. We have paused any reforms to the 80:20 rule, as I want to understand better how the adult gaming centre sector protects its customers from gambling-related harm. I have not ruled out making changes in future, but it felt appropriate to consider this in greater depth. The Government are taking action where it is needed. In our view, these casino reforms are a key part of our wider growth agenda.
On the impact assessment, which was raised by the noble Lords, Lord Parkinson and Lord Foster, redactions are standard practice for commercially sensitive information. I will check again with the department on the question of the redaction around the costs; I will write to the noble Lord on that point and copy in other noble Lords who have taken part in this debate.
I hope that I have managed to cover most of the pertinent points made by your Lordships in this debate. I am really grateful for all the points raised and for your Lordships’ interest in both the land-based casino sector and gambling more broadly.