UK Casino Industry

David Mundell Excerpts

Wednesday 7th July 2021 Westminster Hall

[David Mundell (in the Chair)]

I remind hon. Members that there have been some changes to normal practice in order to support the new hybrid arrangements. Members attending physically should clean their spaces before they use them and as they leave the room. I also remind Members that Mr Speaker has stated that masks should be worn in Westminster Hall.

[Scott Benton (Blackpool South) (Con)]

I beg to move,

That this House has considered the UK casino industry.

It is a pleasure to serve under your chairmanship, Mr Mundell. Before I begin, I refer the House to my declaration in the Register of Members’ Financial Interests.

People’s perceptions of casinos often fall into two categories, either James Bond at the Monte Carlo Casino or problem gamblers chasing their next win. For 99% of people, however, that is simply not the reality. Casino goers are just ordinary people enjoying time out with family and friends. They have budgeted an acceptable cost for an evening’s entertainment, which is no different from purchasing an admission ticket to the theatre or attending the football on a Saturday afternoon.

Casinos bring many benefits to local communities. In Great Britain, 13,000 people are directly employed in casinos, with thousands more additional jobs generated in their supply chains. More than half of those working in the gambling industry are under the age of 35, a far higher proportion than in the wider economy, demonstrating the importance of the industry in providing entry-level jobs for young people looking for experience in the workplace.

Hundreds of people in Blackpool are directly employed in the three casinos across the town, as croupiers, waiters, security and chefs. Casinos offer long-term, year-round employment in my constituency, in what is otherwise a tourism-focused and therefore seasonal local economy.

Casinos also make a substantial contribution to the Treasury. In the financial year 2019-20, 128 casinos were operating in this country, paying a total of £213 million in gaming duty. Their contribution to the national economy and the job opportunities created in many towns, therefore, must be taken into account in the upcoming review of the Gambling Act 2005. The review has to be established on the evidence, not on preconceived ideas and ideology.

--- Later in debate ---

[Scott Benton]

Absolutely. I thank the right hon. Gentleman for his valid points. I hope that, as part of the review that is ongoing, those points can be addressed. Over the last 14 years or so, it would have been hoped that the experiment that I just alluded to from the 2005 Act would have allowed ordinary casinos to be updated, in terms of their practices and regulation. Disappointingly, that has not happened, but the review offers a golden opportunity to now do exactly that.

I was talking about the number of machines operated in some ordinary casinos. The Hippodrome in Leicester Square is restricted to just 20 machines. That in effect means that during busy periods there can be up to 75 customers in the building for every one gaming machine, which is incredibly perverse. Of course, there is little, if any, evidence to link problem gambling to the number of slot machines available. Gamblers can only play on one machine at a time. And there have not been any such issues from the casinos licensed under the 2005 Act that have substantially more machines. Instead, the lack of available machines means that potential customers face long delays to play and, when they finally are able to play, they feel uncomfortable, knowing that others are waiting to do so as well. In fact, it stops people leaving their machines, through fear of losing their spot—counter-intuitive to safer gambling practice.

Introducing a machine-to-table ratio would relate the number of machines to the size of the casino. That would ensure a suitable number of machines for the size of premises and stop ridiculous scenarios such as that at the Hippodrome. Rank Group, which operates 52 casinos, has suggested starting with a five-to-one ratio to cater for customer demand. The size of a casino, and therefore the number of machines, would be for local authorities to decide during planning applications, which would enable them to ensure a suitable local offering.

Existing laws also limit the choice for customers using gaming machines by restricting electronic versions of casino games to those based on physical events. In effect, that restricts casinos to offering only electronic roulette, as games such as blackjack are much more difficult to offer electronically with the necessary physical event. That makes little sense as there is no identifiable reason that a customer is safer or receives any additional protections from a random physical event rather than a random number generated game. [Interruption.]

[David Mundell (in the Chair)]

Order. I do not intend to suspend the sitting for the Division in the House because both you, Mr Benton, and the Minister have proxy votes. Let us continue.

[Scott Benton]

Thank you, Mr Mundell. Legislation fit for the modern-day customer would also enable casinos to offer a wider range of casino games via electronic terminals. That would allow gamblers to play at much lower stakes than on live tables.

A second inconsistency between the 2005 Act and the 1968 Act relates to the ability to offer sports betting. The new legislation allows for sports betting at the casino, yet the historical legislation does not. There is a relatively small number of casinos in the UK compared with the thousands of licensed betting offices. Therefore, any change to legislation to allow sports betting in casinos would have little effect on the betting offices sector. Casinos would not become the favoured place for sports betting, yet they would be able to offer a complementary service to the casino floor. It is archaic and puzzling that casinos cannot offer sports betting when casino customers can simply pick up their phone, open an app and make a sports bet online. There have been no reported issues from casinos that can offer that facility. Yet again, internationally that means we are lagging behind, because that is normally a standard offering in a casino.

It is not just placing bets that people increasingly do electronically. Society is rapidly moving away from using physical cash in all transactions, with electronic payments estimated to be used in up to 80% of transactions in the retail industry. Yet the majority of payments in casinos remain cash-based. No doubt accelerated by the pandemic, in many situations across the UK it is impossible to pay for goods or services with cash. As such, it is scarcely believable that restrictions would bind an industry to cash payments only.

Casinos need to be able to offer a cashless option to keep up with changing customer expectations. The controls on cashless opportunities in casinos are detrimental to business and restrict customer choice. There would be no additional risks to customers, as operators would continue to ensure that safeguards were in place to prevent people from spending beyond their means. That could be similar to the measures casino operators have in place elsewhere.

Other credit issues relate to high-end casinos in Mayfair, which bring in incredibly wealthy individuals from around the globe. Those casinos can accept cheques from players to facilitate the transfer of funds from abroad. However, the future of cheques is constantly in doubt, and some countries have already stopped their use in favour of electronic payments. Without the ability somehow to accept payments from those individuals, casinos would close overnight. Jobs and the significant contributions to the Treasury in gaming duty would be lost, along with the indirect investment and spending brought by those gamblers when they visit the UK. Electronic payments and permitting those casinos to give credit for gambling to high net worth individuals, with robust anti-money laundering controls in place, would make it possible to continue offering that service.

No part of the betting and gaming industry has been as severely affected by the pandemic as land-based casinos. These are small asks that would future-proof the sector while safely increasing what it could offer to consumers. Refusing to bring legislation into the 21st century, and ignoring the demand for gambling by over-regulating the industry, will only see casinos left behind, unable to compete and match the modern-day expectations of customers, which in turn will lead to a decline in jobs and tax revenue, and the sector’s contribution to economic growth. I hope the Minister will address those issues in the review, and I look forward to his response to those points.

The 2005 Act allows for one regional casino, or super-casino as it is sometimes known. A regional casino is defined as having a minimum total customer area of 5,000 square metres, and will be permitted to have up to 1,250 gaming machines. Paul Ward, a hotel operator in my constituency, has experience of working in a large casino abroad, and he has said:

“A super-casino isn’t just about gambling. I worked in a casino in Perth, Western Australia for a while. The employment opportunities were incredible… it created jobs for 1,500 people. The tourism it generated on top was amazing.”

The Government of the time agreed with that assessment and expected that a regional casino would be a major development, offering clear potential for regeneration and bringing in major investment and providing accommodation, as well as conference facilities, restaurants, bars, areas for live entertainment, leisure attractions and, of course, a premium gambling experience.

The primary criteria laid down by the Secretary of State at the time were to ensure that any chosen location would satisfy the need for the best possible social impact, and focus on areas needing regeneration. In a 2019 study comparing 32,000 neighbourhood areas across England, the Ministry of Housing, Communities and Local Government looked at income, employment, education, health and a few other factors. All the neighbourhoods were then ranked against each other. The sad result of the study was that eight of the top 10 most deprived neighbourhoods in England are based in Blackpool—a shocking statistic that clearly underlines the desperate need for substantial regeneration in my constituency.

There is widespread support across town for a regional casino. Ian White, a director of the approved hoteliers’ group, StayBlackpool, has said:

“A super-casino, bringing in dynamic investment would stimulate and support a truly year-round economy that the resort needs.”

Following the introduction of the 2005 Act, local authorities could bid for small, large or regional casino licences. Blackpool, of course, was a clear frontrunner to be awarded the regional casino. However, somewhat surprisingly, the panel recommended that it should be awarded to Manchester. Partly owing to that, a statutory instrument that was required to approve its location was defeated in the House of Lords in 2007. The issue has since been swept under the carpet, ignored and never returned to.

The Select Committee on Culture, Media and Sport looked at casinos in its 2012 report on the Gambling Act, as I am sure the Minister recalls. On regional casinos, the report said that there was

“a general reluctance to discuss the development of regional casinos”.

Perhaps now, 14 years later, the time has come to re-examine the issue. Allow me to share the words of Amanda Thompson OBE, owner and managing director of the Pleasure Beach:

“The creation of a super-casino in Blackpool would herald a new powerful tourism brand for the resort and create a new holiday experience that would be a catalyst for inward investment, supporting growth, development and prosperity across all sectors.”

Although there is clearly no silver bullet to change Blackpool’s fortunes, a super-casino would create many jobs in the town, from contractors working on the site initially to staff at the premises once completed. There would also be a significant boost for local companies that could offer goods and services to the casino, its staff and its customers.

Will the Minister commit himself to reviewing the case for a regional casino during the gambling review and assess the significant positive economic impact that a regional casino could make to a town such as Blackpool, which would be the obvious location to host such a casino?