UK Casino Operators Argue Outdated Laws Prohibit Revenue Growth

Recently, the Future of Casinos seminar was held in London, where UK operators unanimously voiced their opinions that antiquated laws and ‘failed experiments‘ have held them back from competing with the rest of the world’s casinos. They argue that if the slot machine laws aren’t amended, revenue from UK casinos will see a steep decline.

UK Casinos Limited by Gambling Laws“We contribute over £300m in gambling tax each year. That does not include what we pay in corporation tax, business rates, licence costs, income tax and employee insurance,” said Grosvenor Casinos Managing Director, Mark Jones.

“My concern, and I’m sure this is shared by the rest of the panel,” he continued, “is that while the casino sector is growing, we need to take a closer look at the underlying balance that is emerging in our sector.”

Jones detailed the growth rate of casino attendance from 2010-2015, which totaled 3.6million – an outwardly impressively figure – but said 80% of that came from London’s Aspers and Hippodrome casinos. “Attendance has fallen in Scotland, Wales and in the Midlands in the same period,” he said.

While he admitted it’s hard to pinpoint the exact cause, he believes it comes down to the Gambling Act of 2005, which Jones called a “failed experiment” that “created a three-tier casino sector.” Instead of driving economic growth, he said its resulted in his sector being “unfit for purpose in the 21st century”.

Jones referred to the existing UK casino industry being limited by the Gaming Act of 1968, wherein all casinos licenced under that Act “are restricted to a maximum of 20 gaming machines, small casinos are allowed up to 80 machines and large casinos may offer up to 150 machines.”

As such, he stated customers who enter a UK casino “do not know what to expect when they come for a night out. There are very often nowhere near enough machines compared to what they are expecting. Customers want the kind of experience they can get in Las Vegas, Barcelona, Macau or the major cities in France,” concluded Jones.

Simon Thomas, CEO of Hippodrome Casino in London’s Leicester Square, was vehement in his argument that the Gambling Act of 2005 has limited their ability to accommodate patrons of the area’s “second-busiest tourist destination in London, behind Buckingham Palace.”

Large casinos like Hippodrome are greatly restricted in the number of slot machines they are licenced to offer. “In mine, I have 1,100-1,200 customers at peak times and I have 20 slot machines. I have queues for my slot machines and I have an awful lot of very confused people saying: “You’re a casino. Why have you got so few slot machines?” They are used to a large number of slot machines in casinos worldwide.”

Thomas added that the industry is “blocked” from modernisation by those same laws. “We are not allowed to offer an electronic random number generator and are not allowed to offer online gaming inside a casino,” he said.

Further arguments were posed by Aspers Group COO, Richard Noble, and The Ritz Club CEO, Roger Marris, who both agreed with the assessments of their colleagues.

Noble was particularly perturbed by the fact that UK casinos are so limited on slot machines, while retail bookies and bingo halls are not. He noted that, according to the UK Gambling Commission, there were 148 casino, with 2,822 slot machines operating in 2014-2015. “That’s just 8% of the 34,500 operating in betting shops and is 5% of the 55,000 operating in bingo halls,” he said.

“A total of 94% of machines in British casinos are B1 machines, which have a maximum stake of £5, compared to £100 on B2s. They also have a maximum prize of £10,000. So what is now true is that casino players can win far more on their mobiles and at most other casinos in the world,” concluded Noble.

As for Marris, whose high-end casino attracts “the very best clients from all around the world”, it’s not the number of machines, so much as the 50% duty on revenue, that makes it “very difficult for us to be competitive.”

The Ritz Club is one of four Mayfair casinos that “have accounted for one third of the UK casino industry revenue in the last few years,” he said. “Put simply… this duty regime is making us uncompetitive,” argued Marris, determining, “we need to be more like the competition.”

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