The Gambling Commission will not alter its approach to regulation to help support land-based gambling companies that are struggling to cope with rising energy costs.
At present, land-based operators of arcades, bingo halls and Adult Gaming Centres (AGCs) may only allow 20% of their available gaming machines to be Category B machines – machines that generate in excess of £1.25m in gross gambling yield annually.
Category B machines include fixed-odds betting terminals (FOBTs) and fruit machines. Their prevalence as a proportion of all machines in a land-based venue is capped at 20% by British legislation “in order to ensure a balanced offering of gambling products and restrict harder gambling opportunities.”
As a result of prevailing macroeconomic conditions – namely rapidly increasing energy costs and the continuing effects of the Covid-19 pandemic – land-based trade association Bacta (British Amusement Catering Trade Association) recently requested a change in existing Gambling Commission guidance.
They asked to be able to switch off several machines in venues in order to save money on increasing energy bills – but without reducing the number of Category B machines so as not to negatively impact revenues.
However, switching off lower-risk machines and keeping all Category B machines operational would likely lead venues to fall into non-compliance with the regulator’s existing 80%/20% rule.
In response, Gambling Commission director of policy Ian Angus told Bacta members at the association’s 2022 annual convention this week: “We absolutely understand why you might ask us to amend our guidance in such a way that would allow machines to be switched off – cost efficiency is always going to be a focus when margins are tight.
Gambling Commission director of policy Ian Angus: “Our guidance – which has been consistent for many years – has to be based on our interpretation of the legislation. It simply wouldn’t be appropriate for us to amend our guidance due to prevailing economic circumstances.”
“That said, the 80/20 regulations are baked into legislation and that is something that is not within our gift to change.
“Our guidance – which has been consistent for many years – has to be based on our interpretation of the legislation. It simply wouldn’t be appropriate for us to amend our guidance due to prevailing economic circumstances.
“I really do want to be clear that adherence to the existing legislation is essential. If we see compliance failings in this space, we will act,” Angus added.
The policy director went on to celebrate safer gambling developments in the arcade sector – while pointing out that despite the £45m paid out by operators in the UK due to regulatory failures throughout 2022, no regulatory action has been taken against the arcade sector specifically.
However, the Commission’s record settlement in August – a £17m punishment handed down to Entain – did include a £3m penalty for land-based failings.
In one incident Angus described as “worrying”, a customer was not escalated for safer gambling review by the shop or support office teams despite staking £29,372 and losing £11,345 in just one month.
“I should stress that none of this action was taken against the arcade sector, which you might say is a good sign,” said Angus. “But let’s also not give the impression that all wrongdoing exists purely in the online space.
“Failures such as these are completely unacceptable,” he added. “Put simply; there are no circumstances under which it is acceptable for an operator to prioritise commercial considerations over compliance.”
Angus listed developments including the trial of cashless payments through apps featuring age verification as an example of where the arcade sector has excelled this year regarding safer gambling measures.
He asked the sector to go further next year, however, with suggestions to remove auto-play from gambling machines and improve limit-setting standards through better technology.