The British Gaming Board is taking Britain's bookmakers to court to challenge their right to offer customers access to lucrative electronic betting machines.
The board believes that the fixed-odds betting terminals, which offer a number of games, including roulette and bingo, should be reclassified as gaming machines and therefore subject to significant restrictions.
It launched a test case to challenge the legality of the machines last month. If the board is successful and the devices are reclassified as gaming machines, it will severely slow one of the High Street bookmakers' fastest growing revenue streams.
The machines have proved to be a highly popular and profitable innovation for High Street bookies. Hilton, the owner of Ladbrokes, said last month that more than 1,000 machines have been installed in Ladbrokes' shops with a further 1,000 planned by the first quarter of 2003.
Weekly turnover from them at Ladbrokes is in excess of £11 million, which equates to annual profits of around £14 million. So far, only 20 percent of Ladrokes shops have them installed.
IGN turned to prominent U.K.-based betting and gaming lawyer Hilary Stewart-Jones to get her insight and opinion on whether or not the gaming machine struggle with bookmakers could cross-over to Internet gaming.
We asked Stewart-Jones:
Do you feel that recent concerns over gaming machines in the U.K. could point to similar concerns over Internet gambling?
Hilary Stewart-Jones: My view is that it may have an impact on online betting as opposed to gaming.
The concern must be put in context and has only arisen because of a loophole in the Gaming Act of 1968, which allowed bookmakers to put an unlimited number of terminals offering fixed odds betting into licensed betting offices.
The fixed odds terminals initially only offered products such as virtual racing, but this quickly changed into typical casino offerings such as poker, which proved to be more popular. Although originally relaxed in their view, the Gaming Board and other gaming operators became concerned particularly when some of the bookmakers announced plans to roll out thousands more and turn each High Street bookie into a mini casino but without the same controls and restrictions.
Therefore, the test case and any Tessa Jowell-backed legislation which follows is much more likely to address the terminals on physical premises and limit these in terms of numbers and payout. Four (machines) per shop and a jackpot of £500 might be deemed appropriate following the Budd recommendations for machines in betting shops.
To go further would open up a minefield of definitional problems since bookmakers in the U.K. have historically always been permitted to bet on chance events. Online gaming is not specifically permitted in the U.K., so offshore operators offering games would not be affected.
Stewart-Jones has extensive experience in betting and gaming law, including international gaming compliance as well as new betting and gaming products, particularly online. Her experience in this sector also extends to mergers and acquisitions, intellectual property, software licensing, joint venture and broadcast activity. She is a partner with Berwin Leighton Paisner based in London.