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Sir John Bourn, head of the National Audit Office, reported to Parliament today that the Gaming Board could benefit both taxpayers and the gaming industry by making further improvements to its regulatory work. The NAO looked at whether the Board could improve its performance by:

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  • removing unnecessary regulation and relying more on the regulatory and compliance systems of the gaming industry; and
  • in the spirit of “joined up government”, making use of relevant information already collected by other public bodies such as Customs and Excise.

Over the last few years, the Board has been successfully responding to the need for change in a number of areas of its work. To build on this process, the report recommends that the Board should:

  • develop more formal techniques for assessing risk in the different sectors of the gaming industry. Since 1970, the Board’s monitoring of the industry has been based around a minimum number of regular inspection visits to operators. The frequency of visits is not determined by any formal, systematic assessment of risk which takes into account, for example, the results of the operator’s own compliance activities and the outcome of previous inspections. The frequency of visits remained largely unchanged until the second half of the 1990s. Since then, the Board has begun to supplement regular inspections with more focused examinations. So far, these have been confined largely to the casino industry;
  • improve the computerised records of inspection visits so that they can help inform management’s assessment of risk and the frequency of future inspections. The report examined the computerised records relating to nearly a quarter of all casino and bingo club inspections in 1998-99. While useful, the majority of the records contained little evidence of the results of the inspection other than an indication of the topics covered. There could also have been more consistency in indicating the output from the visits, for example, a written report or oral advice to the operator;
  • introduce measures to determine the effectiveness of the Board’s inspections. In 1998-99, the Board spent around £1 million – a third of its budget – in carrying out nearly 4,800 inspections. Three quarters of respondents to the report’s survey of the gaming industry said that the inspections encouraged compliance with gaming regulations and the report provides possible examples of measures for the Board to determine the effectiveness with which this work is carried out;
  • consider, with the Home Office, what package of measures might be offered to attract recruits with the information technology and accounting skills the Board considers are needed. The Board has traditionally recruited its Inspectors from retired former police officers. It recognises the need to recruit people with a wider range of skills and experience but is hampered by its inability to offer higher salaries;
  • build on the closer working relations established with Customs and Excise. Contact between the Gaming Board and Customs and Excise – who collect gaming duty – has traditionally been dependent on individual initiatives at local and national level. The National Audit Office set up a joint meeting between representatives of the two bodies to explore the scope for closer working and sharing information and they have now formed a working group to take this forward; and
  • agree with the Home Office a timetable for reducing the deficit on fees and ending the subsidisation of the other gaming sectors by the casino industry. The Gaming Board is required to recover its costs from the fees it levies on the gaming industry, but there has been an under recovery of around £1.3 million over the five years 1994-95 to 1998-99. Over the years, the fees levied on the casino industry have subsidised those levied on the other sectors of the industry. Such cross-subsidisation runs counter to Treasury guidance.

"The Gaming Board has taken steps in recent years to improve the way it regulates the gaming industry but could achieve still more with a lighter regulatory touch. Better risk assessment, together with more use of the regulatory work already being done by the major operators, would enable the Board to reduce its routine inspections. This would benefit both the industry and taxpayers. Another area it must address is the failure to fully recover the costs of regulating the industry, the current shortfall being around £1.3 million over a five year period."

Sir John

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