The Gambling Act 2005 has not worked

A recent report by Ernst & Young has confirmed what many in the casino industry have been repeatedly warning for some time, that the Gambling Act 2005 which was intended to increase investment in the land based casino business has in fact had the opposite effect. Land based casinos are finding it increasingly difficult to cope with rising costs, particularly the increased tax burden resulting from the rise in the casino duty rate from 2.5% to a starting rate of 15%. Casinos are also being hampered by the fixed stake rules and the quotas for the number of gaming machines. There may however be better news for casino operators, with the Culture Secretary Jeremy Hunt apparently accepting that the ‘Act has not worked’, and the Government is now reviewing the maximum stake limits and the number of gaming machines allowed in casino premises. As Michael Silberling, president of the National Casino Industry Forum, recently pointed out, the current rules regarding maximum stakes severely disadvantage land based casinos compared to their main rivals, the online casinos, where gamblers can play roulette for instance for much higher stakes and from the comfort of their own home. Among the recommendations in this report is that gaming machines which are allowed outside casinos should also be allowed in them, and that a five to one machine to tables ratio should become the norm for all casinos. The report also suggests that Local Authorities should have greater powers to decide the location of casinos in their area and that dormant licences within the current 52 permitted areas should be transferred to Authorities who want a casino. The report also suggests that if these recommendations were accepted, the treasury would benefit from an increased tax revenue of at least £ 45 million, so let’s hope this speeds the necessary changes.