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Report Blames UK Gambling Act

By: Ryan Alders, Wednesday June 22nd 2011
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National Casino Industry Forum (NCiF) is an organization that calls for a well regulated, socially responsible and economically sustainable land casino industry in the United Kingdom. Aggrieved by the state of affairs, NCiF had assigned the reputed and independent business services firm Ernst and Young to study and report on the situation and offer its recommendations. Ernst and Young have completed their study and published the report, which holds the Gambling Act 2005 responsible for stifling the industry. Though the target of the study has been the land casinos, the report will be eagerly studied by the online gambling industry as well.

The Telegraph newspaper has summarized the situation by stating that the Gambling Act 2005, instead of creating more land casinos as desired, has actually limited the capacity of existing casinos to create new products. The major stumbling blocks have been identified as fixed stakes rules and quotas for gambling machines. Because of these the casino operators have been unable to pass the rising costs to customers, and there has been a long term erosion of margins. Another problem stated in the report was the high tax rate that was foisted on the casino industry through the Gambling Act, when it replaced the casino duty rate of 2.5% with a starting rate of 15%, a 500% increase.

The report recommends several measures that could revitalize the United Kingdom land casinos and generate an additional £45 million in annual revenue for the Treasury. 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 machine to table ratio should be applied to all casinos. The restriction on permitted areas should be lifted to enable dormant or underperforming casinos to switch to other viable locations that want a casino. The report also pointed out that the land casino industry is one of the most regulated forms of gambling in the United Kingdom and is at a disadvantage compared to other less regulated forms of gaming, including online gambling.

Michael Silberling, president of the NCiF, stated to The Telegraph, "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." He added that Ernst and Young have been overly cautious in estimating the additional tax collection at £45 million annually. The NCiF has estimated that the extra tax collection would be closer to £100 million and also 5,000 jobs would be added.

Before the publication of the report, the Culture Secretary Jeremy Hunt had said that the Gambling Act had not worked and that the Government was currently reviewing some of the conditions of the Act. Whether it will pay heed to this report cannot be said.

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