Matt Mercer examines fears that liberalisation of the UK’s outdated gaming laws could mean a significant increase in gambling addicts

While new forms of gambling, on the internet and via the National Lottery, have become increasingly popular, it has been nearly 40 years since the laws governing gambling were reformed. After such a long period it is hardly a surprise that the government is seeking to update the regulatory system.

Following the review by Sir Alan Budd which was published in July 2001, ministers published a draft bill last November. The main plank of the legislation was the creation of a new regulator, the Gambling Commission.

The commission’s aims are to keep out crime, ensure gambling is fair for consumers and to protect children and other vulnerable people from being harmed or exploited by gambling. To do so it will have greater powers than the current regulator, the Gaming Board. For the first time, betting shops, betting exchanges and internet casinos will fall under its remit. It will also have new powers to investigate, enter premises, bring about prosecutions, void unfair bets, remove operating licenses and impose unlimited fines for breaches of licence conditions.

The proposals also contain moves to allow for a substantial measure of liberalisation. For the first time, Las Vegas-style casino resorts will be permitted, and indeed encouraged in towns seeking regeneration. Up to 1,250 slot machines will be allowed in the biggest resort casinos, offering much bigger prizes than the current £1,000 limit. Some restrictions that either interfere with adults’ decisions or impose unnecessary costs on business will be removed. As gambling minister Lord McIntosh points out: “There is, for example, no good reason why the law should make it possible to set up a casino in the West End but not the City of London.”

Yet the initial plans have been substantially watered down. The Budd report recommended wide-scale deregulation, but ministers have shied away from this vision. And in accepting 121 out of 139 recommendations from the parliamentary joint committee that scrutinised the plans, the government opted to make social responsibility and protection against problem gambling more of a priority.

Ministers may well have been influenced by those campaigning against liberalisation. Such groups would do well to cite recent research sponsored by the Economic and Social Research Council which suggests that the easing of restrictions on gambling in parts of Australia appears to be a growing factor in homelessness there.

The project, led by experts at the University of Sheffield, undertook identical surveys in four English cities, in the American cities of Boston, Massachusetts, and in Melbourne, Australia. While the patterns in homelessness were broadly similar in the three countries, the greatest exception was that gambling problems were mentioned by 38 per cent of those surveyed in Australia, compared with only four per cent in England and Massachusetts. Electronic gaming machines were introduced in Melbourne in 1992, and have led to a proliferation of gambling in the region.

Under the government’s revised plans, fruit machines in nearly 6,000 fish-and-chip shops and mini-cab offices will be banned; local councils are to be given more powers over the number of new casinos; and the number of new casino resorts will be restricted to about a dozen. Unlike current casinos, which only take money out of a district, these new developments will be expected to make large investments into regeneration by building hotels, leisure facilities and theatres. There will also be regular monitoring to ensure the changes are not generating excess levels of gambling. On top of this, if problems emerge it will also be possible to introduce a statutory problem gambling levy on operators should the current voluntary arrangements break down.

It was perhaps inevitable that the government would back a mass-liberalisation of the industry. Such an expansion without these safeguards could have led to a surge in the number of gambling addicts and a negative public reaction. Whether the correct balance has now been struck between individual freedoms and protection of the vulnerable, however, remains to be seen.

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