Gambling fever worries casinos

Have you committed a crime in order to pay gambling debts? When you gamble, do you go back another day to win back money you lost? Have you lied to family, or others, to hide the extent of your gambling?

Pretty personal questions, but they are just a sample of those in a government survey carried out over the past few months to help gauge the level of problem gambling in Britain.

The last such “prevalence study” was in 1999 and the new survey, timed to coincide with the Gambling Act, which came into force yesterday, will be published later this month. The study is expected to show a sharp increase in the number of problem gamblers in Britain from the current level of about 300,000. Bookmakers and casino operators fear that, despite the government’s protestations to the contrary, it will seize on any increase to clamp down on the industry or hit it with punitive tax rises. “It’s time to put our tin helmets on,” said one executive.

The industry has reason to be worried. The new act was conceived as a liberalising piece of legislation, but as it progressed through parliament it was watered down considerably. Plans for the much-hyped “super-casinos” were scrapped, one of the first decisions of Gordon Brown’s government. The fate of 16 other proposed new casinos hangs in the balance; and in his final budget last March, the then chancellor hit casinos with a big rise in gaming duty.

Ian Burke, chief executive of Rank Group, owner of Mecca Bingo and Grosvenor Casinos, said: “There have been mixed messages from government.” Other executives go further, lamenting that they have been used as a “political football”.

Last week, in an interview with the BBC, culture minister Gerry Sutcliffe stated that he would find unacceptable any rise in problem gambling, before officials from the Department for Culture, Media and Sport intervened to say that the impending prevalence study would be used as “a base-line” by which future levels of problem gambling could be judged.

That the study will show an increase in addiction seems certain. When the last such survey was conducted, internet gaming was in its infancy and few people had heard of online poker – let alone played it. In the past eight years there has also been greater awareness of helplines and charities devoted to gambling addiction.

None of this is likely to go down well with certain sections of the press, and gaming bosses fear a heavy antigambling campaign in the media could give the government ammunition for a clampdown. “If some quarters of the press come out virulently [against gambling], it won’t take much to unsteady ministers on the receiving end of unwelcome bad publicity,” said Lady Penny Cobham, chairman of the British Casino Association.

It may be a forlorn hope but the industry – which employs 200,000 people in Britain and accounts for 1.2% of GDP – would like to see some consistency from government. Neil Goulden, chief executive of Gala Coral, which owns bingo halls, casinos and betting shops, said: “We all need some continuity to be able to plan our businesses.”

The industry claims that further tax rises and greater regulation will have the opposite effect to the one desired. “The financial burden on the industry is growing all the time,” said Roy Ramm, compliance director of London Clubs International, a casino operator. “But you could make an argument to say that if you want an operator to build well-appointed venues where people will take their wives or girlfriends and enjoy a good night out, you have to leave operators with enough money to do that.”

He said there was a danger that if decent operators were taxed too heavily, they would be deterred from investing in the nongaming activities demanded by the government. That, the argument runs, would leave the more unscrupulous practitioners to concentrate solely on gambling, with little regard for social responsibility. To some extent, this is the industry talking itself up, but the increases in gaming duty imposed in the most recent budget are already beginning to bite for some small casinos, while the bingo operators are anticipating wholesale closures as a result of the tax regime and the effect of the smoking ban.

There remains a glimmer of hope that the way bingo is taxed could change. Brown has promised to meet industry representatives, while Rank’s Ian Burke said he had been “encouraged” by the reactions of various MPs he had taken round bingo halls in their constituencies.

Despite the controversy, there is much in the new act that the industry has welcomed. For the first time, casinos will be able to advertise their locations and the games and amenities they offer. They will also be permitted to introduce new games such as Texas hold ’em poker, the popularity of which has soared with online gaming. Bingo halls can start to offer much bigger prizes by retaining a portion of players’ stakes and rolling them up into a jackpot prize, potentially worth millions. And bookmakers will be allowed to stay open longer and to advertise on television.

Some executives warn against getting overexcited. “The reality is, we don’t know whether it will benefit us financially,” saida senior industry source. “There are so many other variables, such as the smoking ban and the possibility of a slowdown in consumer spending. I’m being reasonably cautious about the whole thing.”

Ultimately, gaming bosses want to see the new act come in with the minimum of fuss, give it time to settle down, and let the newly created regulator, the Gambling Commission, which replaces the old Gaming Board, do its work.

Russell Hoyle, chairman of Inspired Gaming, the AIM-listed maker and distributor of amusement machines, said: “We just have to let the new act do its job.“