Inside Asian Gaming

INSIDE ASIAN GAMING | July 2010 40 more, if opportunities arise to acquire casinos or licenses. Interestingly, Waugh is not as critical of the act as many in the industry. “I think people are forgetting that there were some very good things in the act,” he says. “We went from 10 jackpot machines to 20, and the 24-hour rule, which was truly draconian, was rescinded. Casinos are now allowed to advertisemore than their addresses. So there were some pretty outmoded restrictions that have fallen away.” Tax is another matter. British casinos pay a tax on gross gaming revenue that is calibrated at a rate that increases with revenue. The tax was increased in 2007. As it stands now, the first £1,929,000 is taxed at 15%, the next £1,317,000 at 20%, the next £2,329,000 at 30%, up to £4,915,500 at 40%, and at 50% above that. In addition, so- called Category B slot machines in casinos are charged an amusement machine licence duty of £2,815 per machine per year, and the value added tax of 17.5% is assessed on all winnings. These rates are high compared with those of other jurisdictions, but given the state of the country’s finances they are unlikely to be significantly lowered by any new government. “I think we are more concerned about taxation,” Waugh says, “and it is particularly disappointing the Department for Culture, Media and Sport has had its plans for the industry effectively scuppered by the Treasury. We want to see a joined-up approach by Government that aligns fiscal policy with social policy.” Although trading has been tough, UK operators have responded by innovating and looking closely at their offering. LCI and Grovesnor have been leaders in marketing the casino experience as leisure rather than a pure gaming activity. “We want people to look at it in the same way as, say, a night at the theatre,” Ramm says. “In London, if you go out to dinner and a show you won’t get much change out of £150, but you’re OK with it because you have had a good time. It should be the same with the casino. But you have to offer more than just gaming.” Waugh says that Grovesnor has adopted such a strategy with its new G casino brand. “Traditionally, casinos in the UK have just offered table games and slots, and we think customers will want more than that. So our new G casinos tend to be larger than the traditional casinos, but the extra floor space isn’t given over to gaming but rather to a decent quality restaurant, a nice bar and a sports lounge where people can watch the football. In our older casinos we were getting around 90% of our revenue from gaming, but in our new casinos we’re bringing it down to closer to 70%, so we’ve more than doubled non-gaming revenues as a proportion of our business.” While operators are able to innovate in some ways, such as offering entertainment and quality catering, the Gambling Act stops them from changing their core offering of table games. Ramm, for one, worries that new customers, who are familiar with online gambling, will be disappointed with the traditional casino offering. “About the only place you cannot bet online in the UK is in a casino,” he explains. “You can play online at home, or even in a church, but not in a casino. Under the act it is impossible for casinos to offer the kind of technology and gaming product that people are getting used to online. At present, we can only offer card games with paper playing cards. We would like to be able to offer them with virtual cards and offer virtual blackjack and virtual poker.” Simon Banks is a London-based journalist specializing in the sports and gambling industries. UK Gambling Act A lounge in a new G Casino