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What Are the Costs and Benefits of Gambling in the United Kingdom?

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What Are the Costs and Benefits of Gambling in the United Kingdom? WHAT ARE THE COSTS AND BENEFITS OF GAMBLING IN THE UNITED KINGDOM? Yuliya Crane 1. Setting the Scene For a long time, the United Kingdom government considered replacing a very old and out of date Gambling Act, which dates back to 1968. Following the example of Australia where the Productivity Commission produced a substantial Gaming Report in 1999, analysing the present state of the industry, its externalities and future trends, the Department of Culture, Media and Sport commissioned a gambling review study, chaired by Sir Alan Budd in 2001. This report confirmed that the existing regulation was out of date and needed reviewing. The report suggested a considerable relaxation of laws governing the operations of casino gaming. The cross-industry group for gambling deregulation predicted that the number of Britons visiting a casino in any one year would have jumped from 3 per cent to 10 per cent (Ahmed and Mathiason, 2003) if the Budd proposals were implemented. The Department of Culture, Media and Sport published a response to Budd’s study, accepting the vast majority of its proposals. However, after a draft bill became public, there was a large wave of protests from anti-gambling organisa- tions. As a result, subsequent drafts of the bill proposed less and less change. The Draft Gambling Bill originally called for more than forty super-casinos, or as many as the market would bear, but that number was dropped to twenty during negotiations between Tessa Jowell, the Culture Secretary, and the Labour Party in 2004 and then lowered to eight in February 2005 (Smith, 2005). After several years of debate on the appropriate level of gambling regulation, the Gambling Bill was finally passed by Parliament and became law on Thursday, April 7, 2005. Following great pressure from anti-gambling organisations, general popular concern over the proposed new types of gambling (Dodgson, et al., 2004) and the government’s desire to pass the Bill before the election, the Act allows for only one “regional” (super) casino, which will be able to have over forty gaming tables and up to 1,250 class “A” (unlimited prize and stake) Coryn, Fijnaut & Littler (eds), Economic Aspects of Gambling Regulation: EU and US Perspectives, 119–178 ©2008 Koninklijke Brill NV. ISBN 978 90 04 16559 5. Printed in the Netherlands. Economic Aspects of Gambling Regulation: EU and US Perspectives gaming machines. Its location was determined on 30th January 2007 by Casino Advisory Panel, which was “extremely impressed” by Manchester’s proposal for supercasino site in SportCity (Webster and Coates, 2007). Manchester was awarded the licence ahead of previous favourites to host the casino – Blackpool and Greenwich (Millennium Dome). Eight “large” casinos, which are defined as over 1500m2, are also to be introduced in Britain, subject to regional planning and development (Great Yarmouth, Kingston-upon-Hull, Leeds, Middlesbrough, Milton Keynes, Newham, Solihull and Southampton). There will also be eight new so-called “small” casi- nos, which are nevertheless large and different in characteristics from existing casinos (Bath and North East Somerset, Dumfries and Galloway, East Lindsey, Luton, Scarborough, Swansea, Torbay and Wilton). The new Gambling Act, however, does not allow any class “A” gaming machines anywhere except in the single regional casino. Perhaps the Act does not bring as dramatic changes to the industry as was initially anticipated. However, it is still likely to considerably shake up the existing gambling sector. Recent opinion survey studies have shown that public perception is pre- dominantly positive about gambling activities in the United Kingdom. 88.7% of respondents to the survey, conducted by The National Centre for Social Research, had taken part in one or more gambling activity, most of them play the National lottery and scratch cards. However, only about 3% of the adult population in the United Kingdom currently visits a casino at least once a year. This is very likely to change when the new eight “small” and eight “large” and a “regional” casino are introduced. They will represent a totally different experience for gamblers from existing casinos. The new casinos are going to be more similar to American casinos or Australian gaming halls, because they will be dominated by gambling machines. The innovating product that these casinos will offer may attract participation levels similar to participation in gaming halls in Australia. Gambling participation and expenditure are predicted to double in the United Kingdom from the current level of around 1% of disposable income (Marx, 2002). Some expect that, together with the positive economic effects, the expansion of gambling opportunities, might also lead to an increase in negative externalities such as an increase in cases of pathological gambling and problems associated with addiction (Eadington, 1996). Regulators world-wide increasingly rely on economic analysis. Most econo- mists would argue that economic efficiency ought to be one of the fundamental criteria for evaluating proposed (e.g. gambling) regulation. Due to the peculiar nature of gambling, which has equally passionate opponents and supporters, and a world-wide move to legalise and liberalise gambling, governments are particularly determined to get the legislative balance right in order to yield extra benefits, while minimising social costs. One of the approaches often employed 120.
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