At the time of writing, we continue to await the Government publication of the White Paper containing the proposals following the Call for Evidence and Review of the Gambling Act 2005.
The Call for Evidence and Review of the Gambling Act 2005 were published on 8 December 2020. The original expectation had been that the Government would publish further proposals for more detailed consultation and consideration in autumn 2021. One effect of the delay has been a noticeable slowdown in amendments to existing regulations, conditions and codes, as stakeholders await the wholesale changes expected to be proposed in the White Paper.
One feature of the expected white paper, which the industry has been discussing, is the number of B3 gaming machines permitted in our venues.
The holder of a bingo premises licence may make available for use a number of category B gaming machines not exceeding 20% of the total number of gaming machines on the premises. For example, a premises with a total of 25 gaming machines available for use can make five or fewer category B3 gaming machines available on that premises. Premises that were licensed before 13 July 2011 are entitled to make available eight category B gaming machines, or 20% of the total number of gaming machines, whichever is the greater. There are no restrictions on the number of category C or D machines that can be made available. We often call this the 80/20 rule.
The 80/20 rule followed consultation by the Government, as the bingo industry had come under increasing economic pressure during the period 2007 – 2011, at the time the Government reporting that 91 bingo clubs closed in the 4 years. The industry argued that a range of factors affecting trading conditions had been exacerbated by the regulatory framework introduced by the Gambling Act 2005. The Government was persuaded that the situation facing bingo was sufficiently grave to justify considering an increase in the stake limit for the Category B3 machines, and a recalibration of the B3 machine entitlements for bingo clubs. This eventually led to the increase in the stake on the B3 machines to £2, and then of course the 80/20 rule.
At the time, we had suffered the introduction of the ban on smoking in enclosed spaces, which had a disproportionate effect on gambling premises, there had been difficult trading conditions following the economic downturn during the period and, of course, we have seen the increase in a number of B2 gaming machines, fixed odds betting terminals, within betting premises which had a negative impact on machines in bingo clubs.
The Government also alluded to changes in customer preferences, the development of wider leisure and media offerings and increasing competition across the gambling industry as a whole, particularly online.
The purpose at the time, of the introduction of the 80/20 rule, was to give bingo clubs more operational flexibility and freedom to take commercial decisions to prevent further closures and job losses, this would also have a knock on effect of boosting the gaming machine manufacturing and supply sectors through increases in their order book.
The economic situation is similar now. We have seen the massive impact of COVID-19 and the pandemic, with venues closed, we now have the War in Ukraine and the increase in the cost of energy and hyper-inflation, all creating a similar scenario to that we saw back in 2007 – 2011. So, here we are again, asking the Government for more operational flexibility and freedom to take commercial decisions to prevent further closures and job losses. We are asking the Government to reconsider the 80/20 rule.
Back then, the change to the 80/20 rule reduced the incentive on operators to split premises to offer more B3 machines, and reduce the cost of licensing as venues moved back to one licence having split our premises.
We now see a similar disproportionate impact of the regulatory regime, whereby some operators maintain high numbers of old Category C and event D gaming machines within their venues; these are of course now zapping power! We have also seen a significant increase in the use of tablets as gaming machines, as well as for bingo. These, in many respects, are perverse consequences of the current limits on machine numbers which are not conducive to effective regulation, and lead to increased economic and administrative burdens for both operators and regulators. I have noticed that the use of tablets has confused particularly some Licensing Authorities when they visit premises to assess machine numbers.
The cost of power I am sure has led to many operators wishing they could turn off some of those machines, many of which are largely redundant and are there to allow more commercially attractive B3 machines. The Gambling Commission’s guidance on when a gaming machine is available for use requires us to have those machines turned on and available for play without necessary for engagement or intervention with a member of staff.
Let’s hope that the Government appreciates the challenges which lay ahead for our industry, and make a similar change to the regulatory landscape as they did back in 2011 on the numbers of B3 gaming machines within our venues.
Nick Arron is a partner at niche licensing law firm Poppleston Allen. Poppleston Allen act for The Bingo Association and advises its members. Nick can be contacted via email n.arron@popall.co.uk or telephone 07968 805559. www.popall.co.uk
