Is UK Gambling Act Going Under Review?

Ernst and Young report worrying results

According to the recent report issued by the independent business services firm Ernst and Young on the UK Gambling Act commissioned by the National Casino Industry Forum, the Gambling Act 2005, which was expected to create more land casinos, has actually limited the capacity of existing casinos to create new products.

Namely, with fixed stakes rules and quotas for gambling machines, casino operators are unable to absorb rising costs by passing them on to customers. Also, with the increased tax burden, which followed the replacement of the casino duty rate of 2.5 percent with a starting rate of 15 percent, there’s another problem for the companies.

That may be the main reason why two months ago the Culture Secretary, Jeremy Hunt, said the Act “hasn’t worked” and there had been a “whole series of problems with it”. At the moment, it has been specified, the Government is reviewing maximum stake limits and premises entitlements for gaming machines.

According to Michael Silberling, president of the National Casino Industry Forum, “It’s time to take some of these words and put them into action. I think the UK would be grateful for more jobs, more capital investment and more taxes. The time is now, not later.”

In addition, the report provides a number of recommendations how to revitalize land casinos and generate an additional GBP45 million in annual revenue for the Treasury. The comments state:

“* Gaming machines that are legal outside casinos should be allowed in them,

* Local authorities should be given greater power to decide the location of casinos

* A five-to-one machines to tables ratio should be extended across all casinos.

* Casinos can currently only operate in one of 52 'permitted areas’ and these restrictions should be lifted so dormant or “underperforming” licenses can be switched to local authorities that want a casino, stimulating jobs and capital investment.”

In conclusion, the report states that as one of the best regulated forms of gambling, the casino industry constantly feels disadvantaged compared to other less regulated forms of gaming, including online gambling, which is the reason why a number of UK gambling companies moved their operations offshore.

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