A report from the Gambling Review Body has not been favourable to the trade. The future looks increasingly uncertain
Just six months ago the pub industry was planning how it would take advantage of the situation when the Government outlined plans to relax gambling laws.
Internet booths and betting shop franchises within pubs along with raised limits on AWP machines were among the improvements the trade confidently expected to be proposed by the Gambling Review Body.
But when its findings were announced in July, it was with disappointment that the industry discovered not only would betting in pubs remain outlawed, but AWP machines were to be subject to even stricter controls.
The body's report, which was submitted to the Government, stated that research indicated people may gamble more than they intended and take more risks when they mix alcohol and gambling.
Accordingly, the body decided it could not recommend further mixing of gambling and alcohol.
It also recommended that commercial gambling should be "confined to premises which are specifically licensed for gambling and where that is its main purpose".
But the major disappointment contained in the report was the proposal to restrict the number of AWP machines allowed on new pub licences to two.
Many licensees depend on the extra income gaming machines bring them to boost their takings during quiet periods - something that is particularly important now, in the aftermath of foot-and-mouth disease and the terrorist attacks of September 11.
Industry experts fear the stricter regulations could have a devastating effect on many pubs.
One positive aspect to come out of the review was the recommendation that AWP machine prize limits be increased from £15 to £25 - something the trade believes could help struggling licensees in a difficult economic climate. However, although it has been agreed, ministers have not yet set a date for the increase.
When the report was first published, Martin Rawlings, spokesman for the British Beer and Pub Association (BBPA) said he was "extremely concerned" about its proposals while other groups such as the Association of Licensed Multiple Retailers and gambling body BACTA also voiced their worries.
The report was published in July and the industry has had until October 31 to respond to the proposals contained within it. The Government will now consider the report and the responses and an outline for gambling reform is expected early next year.
Trade organisations, pub groups and individuals have all submitted official notice of their disappointment to the Government.
Representatives from the BBPA met with gambling minister Richard Caborn last week to let him know how worried the trade is.
BBPA spokesman Mark Hastings said the meeting had been "positive and constructive" but added it was too early to say whether the Government would press ahead regardless.
"The Government is now clearly aware of the potential impact this could have on the industry.
"The review's aim was to liberalise gambling in the UK, but it is difficult for the Government to argue that it has liberalised gambling in pubs," Mr Hastings said.
The BBPA's submission on the report, which is supported by the British Institute of Innkeeping, pointed out there are 77,000 fruit machines in UK pubs.
"The report's proposals would cause immense harm to the pub industry with severe adverse economic and social consequences," the submission said. "We estimate that £43m per annum would be lost to the industry after five years if the proposals in relation to pubs were taken forward. The loss to the Treasury in duty and VAT would amount to £36m."
The BBPA's submission was also scathing about the basis for the report's recommendation. "The recommendations appear to be derived from a moralistic view which has not been derived from evidence or research and is contrary to public opinion," it said.
John Appleton, director of electronic leisure at Six Continents Retail, helped compile the BBPA's response. "We consider this to be illogical and inconsistent. It will be extremely damaging," he said.
Business in Sport and Leisure (BISL), whose members include pubs, casinos, bingo halls, snooker clubs and greyhound tracks, is also worried about the proposals.
Despite the range of BISL members, they are united in their concern about what could happen should the Government take the recommendations forward.
"I was surprised to find such a level of consensus across such a diverse industry," said Brigid Simmonds, chief executive of BISL. "This greatly increases the chances of the Government implementing a crucial overhaul of gambling legislation."
BISL also believes that controls on AWP machines in pubs could have a detrimental effect and could even force some pubs out of business.
These criticisms are likely to come to a head when gambling minister Richard Caborn speaks at BISL's annual conference on November 21.
"The industry's concern is that the Gambling Review Body has made recommendations without doing its homework," said Ms Simmonds. "No research has identified a problem in this area and the economic implications have been ignored despite being within the remit of the review. In many pubs and clubs, income from machines makes up a third of their profit. These premises would close if the recommendations are implemented."
With such a large number of level and logical objections to the Gambling Review Body's report, it is tempting to assume that the Government will listen to the trade instead of pushing through unwelcome reform.
Although initial reports are good, it is impossible to tell what the Government will do. Will it go against the report's recommendations and do as the trade asks? Don't bet on it.
What the report recommends
- A new single regulatory authority called the Gambling Commission to license all gambling operators
- Responsibility for licensing should pass from magistrates to local authorities with the Gambling Commission issuing procedural rules
- Gambling should be the primary purpose of premises licensed for gambling
- Local authorities should have the power to institute a blanket ban on all, or particular types of gambling premises in a specified area
- The maximum stake for all-cash AWP machines should be increased from 30p to 50p and the maximum prize should be increased from £15 to £25
- Pubs licensed after July 17, 2001, should have no more than two AWP machines.
The trade's demands
- The triennial review recommendation from the Gaming Board of Great Britain to raise the prize for AWP machines to £25 should be implemented as soon as possible
- Pubs to be allowed up to four machines. Express permission should be required for more than four
- Stakes and prizes not limited to inflation-only increases - the triennial review or something similar should remain
- Payment method deregulation - which would allow the use of notes and "smart cards" should be taken forward and introduced as soon as possible
- Clarification on the law on under-18s making it an offence for the underage player to play AWP machines
- No blanket bans on AWP machines in pubs by local authorities.
The trade's objections
- Removing AWP machines erodes customer choice
- There is an implied desire to ban machines from pubs - the review stated that if it was starting from scratch it would "recommend banning all-cash machines from pubs"
- Removing machines from pubs would result in pub closures
- The threat of local authority interference
- AWP machines are an accepted part of the traditional leisure offering.