Report warns of blow to bingo halls from new gaming rules

More liberal laws governing gambling will not lead to a meaningful gain in employment, as suggested by the Government, and will result in a surge in gambling addiction, according to a report from the Henley Centre yesterday.

The report, commissioned by the British Amusement Catering Trade Association, also predicted that many bingo halls, amusement centres and pubs could close as £1bn of consumer spending is diverted into gambling at resort casinos and on internet betting sites.

Although the research was commissioned by BACTA, which fears members could lose out from the Government's plans, it is the first significant piece of research to question the Government's proposals.

The report was published on the day Tessa Jowell, the Secretary of State for Culture, Media and Sport, appeared before a committee of MPs and peers who are scrutinising the draft gambling Bill.

Yesterday's session revealed a hardening of attitudes among the committee's members who privately believe the Government's proposals are badly drafted and question the logic of simply letting the market decide how many new casinos the UK can support. They also grilled Ms Jowell on betting exchanges - internet sites which allow people to offer odds as well as make bets and which have been linked to betting scandals in sports such as tennis.

Yesterday's Henley Centre report predicted there would be significant winners and losers from the draft gambling Bill, with casinos and gambling on the internet, mobile phones and digital TV the big winners.

However, the report warned that closures in other parts of the leisure sector which fail to compete mean there will be no net jobs created, and the Government will generate only an extra £400m a year in tax by 2010.

Such modest growth in tax revenues could persuade some MPs, nervous of the proposals' impact among voters, to withdraw support for measures they see as of only marginal political benefit.

Gambling addiction is expected to increase from affecting 400,000 people to as many as 700,000 people if the new laws come into force.