An open letter to the UK Government Richard Noble, speaking on behalf of the National Casino Forum

Dear Secretary of State,

As Chief Operating Officer at Aspers Casino, I sit on the strategy board of the UK casino trade association, the National Casino Forum (NCF) on whose behalf I now write. As you know, NCF represents all of the land-based casino operators in the UK. This also includes large scale operators like Genting and Grosvenor, independents such as the Hippodrome and Ritz Club and other high-end Mayfair casinos, as well as mid-range regional casinos.

As we have discussed with you, NCF is seeking simple legislative changes that will allow the casino sector to respond to customer demand, boost tourism and keep up with technological advances, whilst remaining at the vanguard of socially responsible gambling. Many of these proposals echo the recommendations of the Culture, Media and Sport’s Select Committee’s report into the working of the Gambling Act (The Gambling Act 2005: A bet worth taking, 2012).

As you can imagine, there are a number of proposals the casino sector would like to see the Government move forward with, but we recognise that politics is the art of the possible. As such, over the last couple of years, NCF has engaged with DCMS, HM Treasury, No.10, the Gambling Commission, other relevant departments and backbench MPs in order to work up a roadmap for the future of the casino sector. Through this activity we believe we have formulated measured proposals that would bring real change to the sector and deliver significant benefits to the exchequer. As such, we have two key proposals - both of which could be undertaken through an affirmative SI:

• Harmonisation of machine to table ratios between 1968 Act and small 2005 Act casinos at a new ratio of 3:1

• Removing the restriction on providing access to internet gaming through terminals situated in land-based casinos.

One of the key reasons we are confident in pursuing these measured proposals is because we know that casinos are the safest place for gambling in the UK – we are recognised by the Gambling Commission as being at the top of the regulatory pyramid. Last Month, Jenny Williams, the former Chief Executive of the Commission, summed it up pretty well when she said: “casinos are the most supervised, controlled places for gambling environments in the world. In the UK, there is very little trouble coming from casinos…they are just not that sort of environment.”

But for us it’s about more than being at the top of the regulatory pyramid; we work incredibly hard to be at the forefront of responsible gambling. NCF’s Playing Safe programme, launched in 2013 to which every casino in the UK is signed up, defines the way the UK casino industry conducts its business. In the last year we’ve also launched a national self-exclusion system called SENSE - an industry first – meaning that a problem gambler can be excluded from Aspers’ casino in Westfield and will then be prevented from gambling in every casino across the country no matter which company operates the property, and SENSE is available 24/7.

Our staff manage a highly supervised and controlled environment in which to gamble. The casino sector employs over 14,000 highly trained staff across the UK and we are also responsible for an extra 4,000 jobs through our supply chain. Over the last ten years our sector has invested in its workforce, taken on apprentices and encouraged more women into management roles. A lot of people are still surprised that 42% of casino staff are women and that 40% of senior management are female.

As our country and our economy have changed, casinos have tried to evolve to suit customer demand. We increasingly provide diverse entertainment venues for any audience in major cities across the UK. We have worked hard to attract tourists and create spectacular gaming venues.

By meeting customer expectations and demand we have built a casino industry which contributed over £400 million of gross value added to the UK economy last year, much of that coming from outside of London.

And we want to do more, but unfortunately we can’t. We can’t because the politics that surrounded the Gambling Act 2005 has led to what can only be called ‘market failure.’

The 2005 Act gave us 16 new licences as part of a trial and there is no indication of when that trial will be over. It is nine years since the enactment of the 2005 Act and of those 16 licences, currently only four are operating. By our reckoning at least six of these licences may never open. That is ‘market failure.’

We currently suffer from two legislative systems sitting side by side and making no sense. Small licences allow an operator a maximum of 80 gaming machines, while ‘1968 Act’ licence casinos can only have 20. So we have a scenario where there can be two casinos, probably of exactly the same size, in the same town, offering the same facilities, but one with four times the number of gaming machines of the other.

This is nothing to do with the issues about regional or ‘supercasinos’ as they were overstated during the debate. And this has nothing to do with the proposed Category A machines with unlimited stakes and prizes that were proposed only for the regional casinos. But this does have everything to do with unintended consequences of casino legislation.

Take for example gaming machines in British casinos. For 2014/15 the Gambling Commission tells us that there were 148 casinos operating, two of which were from the 2005 Act regime, both of them as it happens being Aspers casinos.

The Commission also tells us that there was an average of 2,822 gaming machines operating in casinos in 2014/15. That’s just 8% of the 34,685 operating in betting shops, or just 5% of the 55,157 operating in bingo halls or just under 4% of the 74,146 operating in arcades.

You may argue that it’s an unfair comparison because we have high stakes machines in casinos. And that’s true, 94% of the machines in British casinos are B1s which have a maximum stake of £5, compared to £100 on B2s, and also have a maximum prize of £10,000 or £20,000 on progressive machines. That is a fair comment and normal for casinos. However, this is a long way off the millions that can be won on gaming machines in casinos internationally. We offer highly supervised gaming in an adult only environment and our customers expect to be able to win large amounts. They can win far higher on their mobile phones, on the tables in our casinos or, as already stated, on gaming machines in practically every other casino in the world.

We have considered the outcome of having some parity between the 1968 Act casinos and a Small Casino Licence from the 2005 Act. We can calculate that in 2014/15 there were 146 operating 1968 Act casinos which offered 2,560 gaming machines. That’s the total number minus the 262 we operate at the two large Aspers casinos at Westfield and Milton Keynes. That gives us an average of 17.5 machines per casino.

Even under our proposals it is likely that not all casinos would take up their full allocation of machines, but we have worked on the assumption that all existing, plus the 40 dormant licences, exercise their full allocation; that equates to 186 multiplied by 80 which equals 14,880 machines. That would make casino gaming machines just 10% of the total machine estate in the country, a third of what’s available in bingo halls and a sixth of what’s available in betting shops and arcades. In many countries the only place gaming machines are allowed is in a casino. The norm worldwide is to have harder gambling in a smaller number of bigger premises that are easier to control, regulate and supervise, rather than a larger number of smaller premises that are not.

The impact would be largely unnoticed by the wider public and there would be no increase in problem gambling. Why? Because each new machine does not create a new problem gambler. We are not creating any more casinos, we are just correcting the gambling pyramid and giving the casino gambling customer more choice.

There would, though, be a positive impact of an increase in machines duty going to the Treasury, much from tourists, so an inward flow of money into the country, plus a massive boost to the British gaming machines manufacturing industry, and a boost to casino revenues enabling casinos to invest in their properties and facilities, much of which, again, would be inward investment into the country. This is because we would be giving our customers choice and the kind of casinos that they are already enjoying around the world.

And on the issue of the wider world, it’s perhaps worth mentioning the high-end casinos. These pre-eminent casinos attract the best of global business people to London but don’t really compete with other UK casinos, apart from the relatively small number of other high-end clubs in London, but rather they compete with clubs in Asia Pacific, the US and other parts of Europe.

Casinos like the Ritz and Les Ambassadeurs are profitable contributors to the public purse, and an added attraction for international trade. As policymakers, if you talk to Mayfair, you’re already talking to one third of the sector by revenue.

And there is no doubt that many more high-net-worth players from Asia and around the world would choose to game in London if the casinos here were able to offer them what they are used to getting in other international jurisdictions. But, with UK duty on land-based casinos at 50%, it is very difficult to provide the infrastructure to consistently attract such players. Put simply, and remembering that one third of gaming revenue is generated by four London casinos, the UK duty regime makes us uncompetitive at the level of high-net-worth players.

Not only do other jurisdictions have a lower duty rate but these jurisdictions also have a different duty rate for nationals and foreigners. As the high-end London casinos cater to a global audience, we would like to protect both that customer base and, with it, the contribution they can make to the Exchequer, with a duty regime for international players that enables us to match what our clients experience elsewhere in the world.

In conclusion, there is nothing in what we are asking for that should in any way cause you concern – this is evolution, not revolution. Indeed harmonising the old ’68 Act licences with the ‘2005 act’ small licences would inject some transparency into the sector and end the confusion for customers of not knowing what products or games will be available inside any given casino.

It would mean being able to offer our customers a leisure and gambling experience that is commensurate with the sort of experience they would find in virtually every other jurisdiction across the globe.

Together, the changes we want would unlock further investment in the UK and would allow even more of our casinos to move away from being intense gaming venues and instead become a central part of the UK’s wider leisure and entertainment mix where gambling is but one part of the overall offer.

We realise that it would need a Statutory Instrument and that can take time and effort. But we hope that Government will listen to us, and come and talk to us about it, so we can discuss the economic uplift such a move could make.