DCMS pledges to reform land-based gaming

DCMS Secretary Stuart Andrew has outlined the government’s intention to modernise and safeguard land-based gambling venues as a principal objective of a yet to be  Gambling Review.

The statement was made by the Minister whilst addressing an audience of British leisure and arcade stakeholders at the ‘Bacta Annual Convention 2023‘ – celebrating the 50th anniversary of the trade body representing the British amusement and gaming machine industries.

Opening his address, Andrew stated that DCMS is aware of the economic contribution of the arcade and amusement sector which “produces a collective economic turnover of £1.6bn and supports thousands of jobs across the United Kingdom.”

Furthermore, British arcades are vital employers within local communities, highstreets, and seaside towns. However, a new decade has seen UK gambling venues face the economic challenges of the COVID-19 pandemic, inflation, and rising energy prices.

“I recognise the commercial challenges you are facing, and I believe that the modernising measures we are taking will help to support the move towards a brighter future. Many of you here today will be keen to understand the progress we have made on the land-based gambling proposals set out in that white paper.”

DCMS’s approach to modernising the sector is multifaceted and reflects the diverse needs of a rapidly changing gambling sector and how it engages with changing consumer demands. 

As such, for land-based gambling venues, the Gambling Review’s White Paper will amend the 80/20 ratio governing higher to lower stake gaming machines to enable venues to better meet customer demands and save on energy costs.

“We fully recognise that you believe that this current ratio does not allow you to meet customer demand, and that this has led to the maintenance of large numbers of machines, which are underused but energy-intensive. This situation is undesirable for both businesses and the consumer.”

The White Paper guarantees a change of the 80/20 ratio, but Andrew has warned that venues must ensure consumers are catered for with a “genuine offer of lower-stake gambling opportunities in order to maintain a safe gambling environment”.

Beyond settling the terms of a new ratio, DCMS has outlined significant steps towards the modernisation of venues by the introduction of cashless payments on gaming machines and ending the “current prohibition on the direct use of debit cards on machines, which is out of step with how people expect to be able to pay for things”.

DCMS recognises that the adoption of cashless payments will be a significant transition for machine manufacturers that “won’t happen overnight”. Via feedback from the consultation, the government will establish a “technical framework of minimum standards” for machines to accept direct cashless payments and to protect consumers. 

The modernisation of gambling venues will further hold land-based operators accountable to the planned enforcement of a statutory levy – the framework of which is currently under consultation.

As it stands, the White Paper recommends different levy rates for individual sectors – comprised of a 1% fee on gross gambling yield for online gambling operators, while traditional betting shops and casinos will pay a proposed fee of around 0.4%.

DCMS seeks to apply a levy framework that is clear, fair, and proportionate to the gambling income generated by licensed operators, for which it requires policy stakeholders to submit feedback on the specific consultation which will close on 14 December.

“I want to see increased, independent, sustainable funding directed where it is needed most. This will ensure that people across our country can make informed decisions about their gambling and know where to turn for support should they need it.”

“We have proposed a levy rate of 0.1% to be paid by land-based arcades, which is less than the rate proposed for online gambling operators, betting shops, and casinos. We believe that this is a proportionate approach and should not place an undue burden on the sector.”

On land-based gaming, all proposed measures require secondary legislation, with implementation aimed for summer 2024. However, the timeline is subject to “parliamentary availability and procedures”.

Andrew concluded his address by stating that 2024 will be a pivotal juncture in how UK gambling is reformed towards a sustainable future. DCMS is aware of the Gambling Review’s arduous journey towards its final settlement, in which the government has maintained its promise of open dialogue with industry stakeholders through the process of consultations. 

“I hope that in my time as the Minister I have shown that my door is open, and it will remain open as we continue to deliver what I hope will be the right policies for a sustainable future,” he said.