Examination of Witnesses (Questions 420
- 439)
THURSDAY 15 JANUARY 2004
VISCOUNTESS PENELOPE
COBHAM, MR
ROY RAMM,
MR BRIAN
LEMON AND
MR ANDREW
LOVE
Q420 Viscount Falkland: We have had evidence,
academic input, and it is the view of academics that if this scheme
of having resort casinos is going to work properly, then it has
to be part of the entertainment industry rather than of the gambling
industry specifically. There seems to be a difference between
you on that.
Mr Lemon: Presentationally perhaps,
but I do not think that the resort casinos will work without their
core product.
Mr Ramm: If I could just add one
tiny statistic, I think it is true to say now that something like
55 per cent of revenue in Las Vegas is non-gambling revenue.
Q421 Viscount Falkland: On the planning
question, as you will be aware, the Committee has visited Blackpool,
and we were impressed there by the proposal that regional planning
bodies should be involved in resort casino project development.
Do you agree with Leisure Parcs' view that this is an appropriate
process and will ensure an effective and cohesive approach to
securing the economic benefits in the areas of greatest need?
Viscountess Cobham: I certainly
think that regional planning bodies should be involved with resort
casino development and planning, and it does mean that, where
there is a very large development, not only the local area but
the region benefits, and serious consideration is given to questions
like access.
Mr Love: The only difficulty I
see in respect of that is if the regional planning bodies, for
some reason, are in discord with the local authorities that are
licensing the product. It would only be for that reason that I
would say the regional planning bodies should not be involved,
inasmuch as you need a unified and considered approach to the
whole of the licensing structure, and if it is to be by local
authorities, then it should be by local authorities and not necessarily
by regional planning bodies. As long as the two are in accord,
then that is fine.
Q422 Lord Faulkner of Worcester: If it
were the case that, say, the North West Regional Planning Authority
were to say, "We want to regenerate Blackpool and we are
prepared to give Blackpool the opportunity to develop a resort
casino, but we are persuaded that to do so requires a limitation
on casinos elsewhere in the North-west and therefore we are not
going to allow expansion in Manchester or Liverpool," how
would you feel about that?
Mr Love: I thought the whole purpose
of the Bill and the Act was that it should be a free marketplace.
By suggesting that, you are immediately taking away from the intent
and purpose of the Bill.
Q423 Lord Faulkner of Worcester: Even
though it might actually kill off the resort casino concept?
Mr Love: Why should Blackpool,
in truth, be prioritised against Preston, Manchester or anywhere
else?
Viscountess Cobham: I do not think
BCA could support what might be termed exclusion zones. It must
be for regional planning bodies, local authorities and the market
to actually decide upon a resort development which really will
stand on its own, be something rather different, play its part
in short breaks and offering different sorts of facilities above
and beyond that of large casinos. No, we could not possibly support
what I would term exclusion zones.
Q424 Lord Brooke of Sutton Mandeville:
As a matter of curiosity, have the two witnesses who spoke primarily
on this question read the Planning and Compulsory Purchase Bill?
Mr Love: I can admit freely that
I have not, sir.
Q425 Mr Page: As we are looking at resort
casinos to regenerate areas, and undoubtedly they will be asked
to contribute a sizeable sum of money to the public good in a
particular area, do you not think a casino operator may ask for
a degree of protection for a period of time, otherwise it will
be rather reluctant to put a lot of money in that could suddenly
be put to nothing by the local authority licensing casinos ad
lib?
Viscountess Cobham: If you look
at any planning application, there is consideration of its role
to play in a very local area, a local area, a region or indeed
a country. The contributions and the drawbacks of a particular
application are always a consideration in planning, and obviously,
with any very large application, the authorities are going to
have to make consideration of the contributions to the good of
the area. So I think it is scaled up when you get to something
the size of a resort casino, but I have no doubt that large casinos—and
perhaps we are coming on to this—will also make contributions
on a more modest scale. It is all relative.
Q426 Mr Wright: I had a question specifically
on that point, in relation to an obligation that should be placed
on casino developments to contribute to regeneration of areas
in accordance really with the desires of the regional development
agency in those areas. What are your views on that? Should there
be an obligation?
Viscountess Cobham: I certainly
think that any regional planning body will want to consider carefully
a major contribution, as it would for any other very large development,
and there are comparisons. I myself think it is wrong to draw
casino development into a quite separate category and make particular
obligations, though there would be obligations, yes.
Q427 Mr Wright: If you take my area,
for instance, in the east of England, my constituency is Great
Yarmouth, a deprived area. It has two casinos at the present time,
and it would probably be appropriate for support from the regional
development agency in that particular case. I could well imagine
our RDA suggesting that perhaps Great Yarmouth may well be one
of two areas. Casino operators may well consider that they would
rather go into one of the cities, perhaps Norwich or Ipswich.
If the regional development agency were to suggest that regeneration
is of paramount importance and considered that was what should
happen, what would your views be?
Viscountess Cobham: I think it
would be surprising if a commercial operator were not to give
serious consideration to such encouragement, but at the end of
the day, commercial operators will make their decision, and if
they see that what is proposed by an RDA or planning body or anyone
else is not going to be viable for them, they will not develop
that.
Mr Love: One of the problems is
that you become selective as to which area should be "helped"
by reducing the number of casinos around it. So we might say it
would be Blackpool, we might say it would be Yarmouth, we might
say it would be Docklands. How is the selection process done?
My own view is that a project—and you refer specifically
to Leisure Parcs, and they have been campaigning very vigorously
and properly for some time -will either stand on its feet by itself
or it will not.
Mr Ramm: We are getting hung up
here because the distinction is not clear in everybody's minds
between a large casino and a resort. If the product is good enough,
if it is exciting enough and it has the facilities, people will
come and stay in Yarmouth, they will come and spend two or three
days and stay in the hotel and maybe use the conference facilities
and enjoy a spa, maybe see a show. That is quite different to
going out for an evening in Norwich and having a good meal in
a large casino and enjoying a pleasant evening. They are substantially
different products.
Q428 Mr Wright: So you consider then
that you will get two different clienteles for those two products?
Mr Ramm: Yes, but you would get
over that. The person that might go to Norwich for an evening
might say, "I have really enjoyed this. This is a nice environment.
Why don't we have two or three days in Yarmouth?"
Q429 Chairman: So in fact, what you are
saying is—and this was put to us very forcibly in Yarmouth,
very forcibly indeed by one prospective developer—that unless
he was given a clear run for Yarmouth, and Norwich and Ipswich
stopped, it would be dead in the water and would not have a chance.
But what you are saying, Mr Ramm, is quite the opposite; you are
saying that if people get used to going to casinos—at the
moment they do not go because they are not members; the clients
that Mr Lemon referred to before are all members of your clubs.
Mr Ramm: Yes.
Q430 Chairman: What this is now proposing
is that anybody can walk along the street and go into a casino.
It is your point, is it not, that people who may well enjoy the
facilities of a new casino in Norwich might then equally go to
a resort casino down the road in Yarmouth if it offers them even
more facilities?
Mr Ramm: Yes, and of course, the
resort casino would draw from a much wider market. It is intended
that people come from northern Europe, I understand.
Viscountess Cobham: As a Board
Member of Visit Britain, I have just been in New York with our
office there and talked a lot to the journalists there. I think
that in this country there are varying views as to whether newly
developed casinos will attract overseas visitors, and that is
not my point, but I was astonished by the fact that we are even
seeing more and more Americans taking short breaks. I think the
short break market should not be under-estimated.
Q431 Viscount Falkland: This is interesting,
because as I say, we have been to Blackpool and we have looked
very carefully at and discussed widely the casino project philosophy.
It does seem to me, carrying on my original question about planning
bodies, and it seemed to others of us, that with the investment
of the kind that would have to take place in Blackpool to transform
it into what was visualised originally in BUDD, and has been taken
on board by the Government as a part of the deregulation which
will lead to a net benefit to all kinds of things including tourism,
obviously, to draw people from northern Europe, as you say, is
an important part of increasing tourism. It did seem to us that
if this dream were to be achieved, we would need a degree of planning
which would possibly be too dirigiste for us British to even consider,
because if you had the kind of resort in Blackpool which would
work in that way, and people were going to invest to the extent
that it happened, it would go way beyond the regional planning
body's ability to make the strategic decisions of what other,
if there were others, casino resorts should emerge. There was
talk of having possibly four of these things within the British
Isles. It seems to me that in order to do that, with the size
of investment involved—I do not know whether you agree with
this—that would need a considerable amount of government
input in terms of strategic thinking. The conflict seems to me
that the free market just would not work in achieving this dream.
I think I understood from earlier remarks that you are quite sceptical
about the resort casino project working anyway. I think Mr Love
said that earlier. If that was your feeling, I agree with that
at the moment, unless there were central planning at government
level to increase our tourism here and to have a significant effect
on our tourism revenue, which seems to me to be hard to achieve.
Mr Love: One of the points that
I absolutely and fundamentally agree with is that unless they
have some specific freedom zone, the thing will never work. That
is one thing I do believe. If you put a major resort casino costing
millions of pounds in Blackpool, I find it very difficult to believe
that it will work unless they have an area of non-exclusion or
non-commercial intervention. Given that that is the only way I
believe it would work, then I believe it is quite improper that
they should receive that.
Q432 Chairman: Improper?
Mr Love: Yes.
Q433 Chairman: What if the developers
were chosen by competitive tendering?
Mr Love: That adds to a later
point, and I think that is the only way that you can possibly
choose between competitors.
Viscountess Cobham: Chairman,
as the representative of 90 per cent of the existing British casinos,
I do think that my job is to try to encourage a thriving industry
in the future. I think that our successors at this table will
speak for themselves and be able to answer some of these questions
more adequately as to whether they will be able to make the sums
add up and whether they will invest and what the circumstances
will need to be for them to make that investment, but I am clear
that for the industry to grow and for wider facilities to be available,
both for people in this country and for some overseas visitors,
we need to not try and solve all the ills of the country with
this Bill, but to provide a fertile backdrop for the commercial
sector to develop in.
Chairman: It is clearly going to come
down to a case of priorities but there are one or two more questions
we want to explore in this field.
Q434 Lord Mancroft: How many of your
90 per cent of casinos would wish to apply to set up a resort,
do you think?
Viscountess Cobham: The majority
of casinos in this country are owned by large companies, so I
cannot sit here and tell you their commercial plans, but I do
know that some of them have been exploring the future with care,
some have joint ventures set up with other investors, and I would
be surprised if at least one of them did not look at developing.
Q435 Lord Wade of Chorlton: Before I
ask my question, I should just say that I am friendly with the
Chairman of the TJH Group and Stanley Leisure. Do you think that
prior to approval being granted for a large casino there should
be a comprehensive independent socio-economic evaluation to assess
the likely impact on the area in question?
Viscountess Cobham: If we are
talking about large casinos as opposed to the one or two resort
casinos which we have just been touching on, I do not see large
casinos being different to other large developments and no doubt
commercial companies will commission reports that are appropriate
for the area or for the particular development just in the same
way as other large developments. So I do not think it I necessary
and I think that the social side of casinos is dealt with by a
strict regulator.
Mr Love: I am in accord.
Q436 Lord Donoughue of Ashton: I should
declare that I am a shareholder in Stanley Leisure. I am sure
the Committee noted with great interest when Mr Love said he saw
this Bill as promoting "a free-for-all". I am sure that
was helpful to us. How many large casinos do you think could be
supported in the United Kingdom by forecastable demand?
Mr Love: My answer to that is
I believe it is impossible to answer that question at the moment,
as by and large our population has no experience of large casinos
other than visiting them in foreign lands, and it think it will
depend much upon the reaction and the manner in which they are
marketed.
Viscountess Cobham: I think, Lord
Donoughue, the question of the ratio of machines to tables is
going to play a part in this, because at the moment it is quite
hard to imagine large numbers of applications for developments
between the 5,000 and 10,000 sq ft gaming floor size, because
if you go just over that, you can have unlimited machines. So
I think that is bound to have an effect on your question, but
perhaps I could ask Roy to say a quick word.
Mr Ramm: I very much support what
Lady Cobham has said. We see this issue of the machine ratio being
absolutely crucial, and I know it is a question that we will be
coming to shortly, but probably, of the 125 or so additional casinos
which have been forecast by Ernst & Young, we share that assessment,
and think that most of those will be large, but large as opposed
to resort casinos.
Q437 Chairman: Most of that 240-250?
Mr Ramm: Of the additional ones.
Q438 Lord Donoughue of Ashton: I think
that is helpful. The concept of machine casinos. Could I ask about
the future structure and control of our industry if it proceeds
on a free-for-all basis? Is it possible that we will simply change
from an industry of modest components, quite large companies but
small internationally, to one that is mainly controlled by large
overseas operators, Americans and French and so forth?
Viscountess Cobham: I would be
astonished if my members did not continue to be major players
in the United Kingdom. I think that their shareholders would be
hugely disappointed if they were not major players.
Mr Ramm: I would just like to
endorse that point. I do not have anything great to add. I think
the existing UK operators will play a very significant part in
developing this industry.
Mr Love: Personally, and as an
Association, we believe there is adequate expertise available
in and to British companies, whether they import some of that
expertise, and frankly, it would be a great shame to give the
opportunity only to overseas operators. There has been much talk
of inward investment, but presumably those profits will be repatriated
to their country of origin.
Q439 Chairman: Do your members have the
resources?
Mr Love: I suspect that at least
one of our members has the resources, Mr Chairman, and it should
be said that whilst Lady Cobham does account for 90 per cent of
the casinos that are currently open, the membership is very nearly
60:40. We have 50 per cent of the action with the same number
of members. It is just that significantly large companies own
many casinos and individuals perhaps only one.
Mr Ramm: Just to round off, Mr
Chairman, on British operators, and I think both COA and BCA would
agree on this point, for 30 years the industry has been in a very
confined position because of the regime, both the taxation and
the regulatory regimes, so the UK industry has not developed in
the way that maybe the American and the South African and the
Australian industries have grown and developed. So there is an
advantage to some of those guys coming in that they know how to
run bigger operations, and I think we are all prepared to try
and rise to that challenge.
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