Take a Gamble on Bigger Profits
It's looking like 2009 could be a challenging year for the hospitality and leisure industry. Aside from the economic downturn and general trading difficulties, the sector has experienced a massive increase in licensing fees as we move towards the Licensing (Scotland) Act 2005. Recently we learned that as many as 20% of licensed premises in Scotland had not applied for the new Premises Licence by the relevant dates, in many cases simply because they couldn't sustain the increase in costs and the drop in sales. Rural tourism in particular could be severely affected, but the extent of the damage won't fully be gauged until later this year. In the meantime, many pubs and hotels have turned their attention to the new gambling laws as a way of boosting profits.
The Gambling Act 2005 came into force on 1 September 2007, liberalising the approach to gaming and generally making it easier for pubs and hotels to provide gambling facilities for their customers.
There are five ideas to consider, any of which could help to boost your business.
1 Gaming Machines: Check your entitlement. Under the new rules, each licensed premises with a bar is legally allowed to have two machines; many premises only have one and don't realise they are allowed another. All that is required is a letter to the licensing board and a one-off £50 fee. Profits from gaming machines can be considerable and the Government has just issued a consultation to increase the amount of prize funds.
2 Poker: Immensely popular, poker may be played in pubs and hotels, so long as certain limits in stakes and prizes are observed. There is no need for a licence or permit but operators are advised to seek legal advice for a full rundown of the rules and regulations.
3 Charity Nights: The new gambling laws allow "gambling" for charity. For example, you could hold a themed casino night with an entry fee. You are allowed to reclaim expenses from the entry fee but not to make a profit (any excess would go to the charity). While such nights are a great way of increasing sales at the bar and awareness of your premises, certain rules of conduct should be observed, and legal assistance is advised before hosting such an event.
4 Bingo: Some operators already have established weekend bingo tournaments. You don't need any special permit or licence to allow bingo, and the only rule is that prizes may not exceed £2,000 a week. Again, you can't make a profit from the bingo itself, such as an entry fee, but you can of course make ancillary profits at the bar and through food sales.
5 Big Tournaments: For hoteliers and some publicans, there is the possibility of holding a large gambling tournament through a procedure known as a "temporary use notice". This would involve the holder of a gambling operating licence, such as a casino chain, using your premises to provide a one-off, temporary tournament like a national poker event, with heats and a final. This is a particularly rare procedure, however and legal advice is recommended.
While these forms of gambling are potentially profitable, operators should remember that they are strictly for over 18s only, and that betting in a licensed premises remains illegal. Punters may still fill out their betting slip in your establishment but no betting whatsoever can take place, including "runners" taking bets from your customers and placing them in the bookies down the road.
However, with the combination of bright ideas and appropriate legal assistance, you could transform the fortunes of your business through the introduction of one or more initiatives from the list above.
For further information, contact a member of our Hospitality and Leisure Team