Bacta Executive Director George McGregor was in campaigning mode at this week’s AGM – the industry, he noted, has a lot to fight for in the coming 12 months. Pushing the White Paper over the line; ending ten years of stakes and prizes statis and protecting the industry from a disruptive and existential threat of new technical standards for gaming machines. Oh, and then there’s the other existential threat fashioned out of the Autumn Budget where high street and coastal resort operations could be decimated by a tax assault from the government. As McGregor acknowledged, 2024 was hectic, but Bacta probably ain’t seen n-n-n-nothing yet.
Good morning ladies and gentlemen.
I’m pleased to see so many Bacta members here today. And indeed, so many Bacta guests.
You are very welcome.
For those of you who I’ve not met – I am George McGregor, Bacta’s Executive Director leading on Government Relations, Regulatory Affairs and Communications.
This is my first Bacta Convention in my capacity as Executive Director.
But it is not my first Bacta Convention.
Far from it.
My first Convention was back in 2004 when I was a young public affairs adviser to Bacta.
And I have been to just about every Bacta Convention since then.
Twenty years ago the hot topic of debate was the Gambling Bill (which was proceeding through the Committee Stages of the House of Commons).
You will recall the Labour Government at that time was simultaneously proposing 40 super casinos and wanting to cut the prize on Category D machines – it said to promote social responsibility.
Of course, neither proposal was ever implemented.
But – as we all know – the Gambling Bill did come into law to become the Gambling Act 2005.
And that piece of legislation has shaped the industry for the past two decades.
It’s funny how so much has changed in the past 20 years. But also how little has changed. We are still having a continuing conversation about the Gambling Act.
Change
Now the word “change” has been the word of this year.
And what a year it has been in terms of “change”.
• We end the year with a new Prime Minister in Downing Street.
• Leading a new Government which has a huge majority.
• With a new set of Ministers in DCMS and Treasury.
• Implementing a new agenda set out in the Kings Speech in July.
• And a whole swathe of new MPs (with over half of them newly elected).
Engagement
For Bacta “change” has brought opportunities as well as challenges.
We’ve worked hard to forge relationships with a new set of stakeholders at Westminster, Whitehall and constituency level.
Since the General Election we’ve met with the new Gambling Minister Baroness Twycross in her offices across the road at DCMS and it was a constructive first meeting.
We’ve engaged with the new Shadow Culture Secretary Stuart Andrew who I am delighted to say will be addressing the Convention later this morning.
We’ve arranged a series of visits to Bacta venues for new Labour and Conservative MPs.
And most recently we hosted the newly elected MP Nigel Farage, Leader of the Reform Party, who visited two Bacta members in Clacton in Essex.
Bacta is committed to working with all Parliamentarians from all parties to take forward our key lobbying objectives.
Despite all the political change there have been some welcome constants in the past year – and I want to put on record our warm appreciation to those officials from both DCMS and the Gambling Commission – many of whom are here today – who we have worked closely with throughout the year.
We have regular catch-ups with DCMS and we have met the Gambling Commission CEO and his officials on a number of occasions in Birmingham, London, the Mumbles and Southampton.
Growth
In all our political engagement we are mindful of the new Government’s set of priorities and how we can work with the new Government to help it achieve its objectives.
At the time of the General Election Bacta enthusiastically welcomed the newly elected Government’s focus on growth.
And we publicly stated that we wanted to partner with the new Government to help it achieve its objective.
After all, what Bacta member in his hall does not want to grow their business?
And what Bacta member does not want the legislative and regulatory framework to help make that happen.
That’s one of the reasons we have entitled this year’s Convention “Going for Growth”.
We believe the future for our sector will a bright one:
• with Bacta members helping to positively reshape the High Street,
• with Bacta members helping to stem pub closures,
• with Bacta members helping to rejuvenate our seaside towns,
• and Bacta members helping to deliver the growth the Labour Government craves.
Since the General Election in July, I am sorry to report that a number of the recent announcements from the Government have hindered (rather than helped) its chances of achieving its growth mission.
We had concerns before the Chancellor’s Budget in October about the cost pressures on our members – but these concerns have skyrocketed since.
Before the budget Bacta members were suffering from the double whammy of increased energy costs and increased labour costs through two consecutive years of double-digit pay rises.
After the Budget we have a triple whammy:
• Further labour cost increases with yet another increase in the National Minimum Wage
• The historic Employers’ National Insurance Rises and the reduction in the threshold to £5000
• And reduced business rates support to 45 percent
Cumulatively these are huge economic blows to individual Bacta members.
We are currently conducting a survey of Bacta members on the Budget changes.
If you’ve not yet completed the survey there is a QR code you can click on in your pack – and its above my head.
The provisional results demonstrate that:
• The Budget measures will wipe our their profit margins.
• That members will put investment decisions on hold.
• And that members will employ fewer staff.
What is clear is that the Chancellor needs to think again.
Gambling Changes
I want to turn now to three gambling specific changes which will determine the growth potential of our sector.
• The Gambling White Paper
• Gaming machine stakes and prizes
• And the Gambling Commission’s Review of Gaming Machine Technical Standards.
I will briefly address each in turn.
Gambling Issues – White Paper
In our sector the one thing above anything else that could help deliver growth is the implementation of the Gambling White Paper recommendations.
The final White Paper proposals were announced by Stuart Andrew in May. About six months ago.
They had cross party support – which we welcomed – and were the product of years of debate about the best way forward.
They were a balanced package of measures which had our full support.
Of particular importance to Bacta was the:
• Recommendation to introduce cashless play subject to a Gambling Commission consultation on maintaining player protections.
• And the modernisation of machine ratios in Adult Gaming Centres – a long overdue reform.
Everything was ready to be enacted through statutory instrument.
Until Rishi Sunak decided to go out into Downing Street in the rain and everything was paused because of the snap General Election.
So much expectation. Only for it to be dampened quite literally.
That brings us to today where the new Minister – Baroness Twycross – is carefully reviewing how to proceed.
When we met the new Minister we urged her to make rapid progress in implementing the FULL package of reforms – to end the uncertainty in our sector and allow us to move forward.
We look forward to her decisions in the weeks and months ahead and to the green lighting of reform.
Stakes and Prizes
The second issue where urgent action is required is stakes and prizes.
Given the enormous costs pressures in recent years – wage costs, energy costs, swag costs, taxation – the continued ongoing freeze on stakes and prizes just cannot be justified.
• The last increase in stakes and prizes for Category D machines was 15 years ago.
• The last increase for Category C machines was 10 years ago.
• And the last increase for Category B3 machines was 13 years ago.
During this time Bacta has raised this issue again and again with both the Government and the regulator – and we will not relent until we see progress.
No business can continue to operate in such a way.
Year after year, the relative attractiveness of our products is diminishing.
Take the machines in pubs as an example.
The £100 stake available in 2014 is much less attractive now than it was then and customers are simply migrating to options online.
How is that fair competition or a level playing field.
How does it help the pub sector which is heavily reliant on machine income to stay afloat and avoid closure.
There is a need to see progress on this issue and we have formally requested of Government a review of stakes and prizes to begin the conversation about the new and appropriate levels.
We really need action now.
Technical Standards
The third gambling related issue I wish to cover – which has caused much consternation among members – is the Gambling Commission’s review of Gaming Machine Technical Standards, which Joseph has mentioned.
Back at the start of the year we were advised that the review was a tidying up exercise to incorporate existing codes into regulation.
We welcomed this.
We were also told we had the opportunity to suggest updates to the code to deliver a better experience for customers.
We welcomed that too.
In such circumstances we were slightly taken aback – to put it mildly – in the Pre Consultation period when we were advised of a series of proposed changes which would have to be retrospectively applied to every gaming machine in the country irrespective of the age of the machine and whether it was even possible to make such software updates.
The Gambling Commission asked us to collect data on this and the response from members to this data request was unprecedented.
We received 106 in 3 days which demonstrated that if such proposals were implemented then literally thousands of machines would be declared illegal and have to be scrapped.
For some of our members – especially in the Clubs and at the seaside – the initial proposal represent an existential threat.
Of course, the key thing to remember is that this is a pre consultation exercise and the Gambling Commission have stressed they are in listening mode and are open to adjusting their proposals while still pursuing their objectives.
That sounds reasonable to us and we look forward to continuing to engage with the Commission to ensure a sensible package of changes emerges which is
• evidence based
• proportionate
• reasonable
• and feasible
And does not cause undue harm on the industry.
Conclusion
So – in conclusion – it has been a busy year at Bacta.
And next year – 2025 – looks like being just as busy.
I’m one of life’s optimists (along with our President John Bollom) who always believes progress can be made.
And my hope for next year is that
• we can make progress on the White Paper reforms
• that we can make the case for a stake and prize review
• and that we can end up with a reasonable package of technical standards changes
But we will only make progress if we continue to make a powerful, persuasive and compelling case for change.
And if we work as an industry to take our case to Government and Parliament.
We are truly stronger when we work together.
Thank you very much.
