Memorandum from Park Place Entertainment
Corporation (DGB 25)
1. EXECUTIVE
SUMMARY
1.1 This paper has been prepared for submission
to the Joint Committee on the Draft Gambling Bill in order to
aid the group in its examination of the Bill.
1.2 Park Place Entertainment Corporation
(PPE) is one of the world's largest casino gaming companies and
is the United States' leading operator of international casino
resorts.
1.3 PPE is encouraged by the Government's
commitment to reform the gambling laws and endorses the Government's
wider objectives in reforming the law.
1.4 PPE would encourage the Government to
publish the remaining clauses of the Bill as quickly as possible.
1.5 In responding to the Draft Gambling
Bill, Park Place would make the following principal observations:
Planning Issues—If large scale capital
investment is to be encouraged in projects that will generate
opportunities for major economic development, it is important
that there is a clear understanding and appreciation at the Regional
level of the benefits that casinos incorporating major resort
style facilities ie large scale entertainment/leisure/retail components,
will deliver. PPE would therefore recommend that the legislation
be amended such that all casinos of 10,000 sq ft or more, and
having 40 or more table games, are of "regional significance"
and their location/approval should be the subject of the regional
spatial strategies and local development plans of the Regional
Planning Boards.
Machine-Table Ratios—PPE believes the
proposed machine ratio will adequately limit the proliferation
of machines in unsuitable locations and are strongly in favour
of this control.
Floor Size and Grandfather Rights—The
minimum floor size of 5000 sq ft, will go some way towards discouraging
proliferation of casinos, especially in unsuitable locations.
We remain concerned that existing UK operators may get licences
to create 10,000 sq ft plus facilities before the Bill receives
Royal Assent and then convert them into "shed casinos"
using Grandfather Rights granted under the new Act. This could
again impact the viability of large resort style casinos and their
potential for economic development.
Linked Machines—PPE is pleased to note
that the prohibition on linked machines is included in the primary
legislation. By limiting the availability of high jackpots to
large casinos it removes any possibility of these machines being
placed in unsuitable locations.
Issuance of Credit in Casinos—The Bill
as drafted contemplates a continuing prohibition on the issuance
of credit for casino gaming. This prohibition would place UK casinos
at a considerable disadvantage to their international competition.
PPE would therefore recommend that the legislation be amended
to allow the issuance of credit for casino gaming and that the
Gambling Commission, after consultation with the industry, should
develop a Code of Practice for the granting of credit in casinos.
2. INTRODUCTION
2.1 Park Place Entertainment Corporation
(PPE) is one of the world's largest gaming companies and is the
United States' leading operator of international casino resorts.
With $4.7 billion in annual net revenue, 29 gaming properties
in five countries on four continents, 29,000 hotel rooms, two
million square feet of casino space and 54,000 employees, the
PPE portfolio is unequalled in the casino resort industry. PPE
brands are among the most respected and best recognized in the
world: Caesars, Paris, Ballys, Flamingo and Grand Casinos. PPE
will change its name to Caesars Entertainment Inc on 6 January,
2004.
2.2 PPE is uniquely qualified and experienced
in owning and operating casino resorts in cooperation with local
partners around the globe. No other operator in the U.S. gaming
industry has demonstrated its cultural sensitivity, adaptability
and expertise in working with different ownership and management
structures.
3. GAMBLING LAW
REFORM
3.1 PPE is encouraged by the Government's
commitment to reform the gambling laws. The proposed creation
of a single Act of Parliament covering all categories of gambling
activity, which is simple and flexible and without the need for
future amendment in response to minor technological or commercial
developments, is welcomed.
3.2 More generally, PPE endorses the Government's
wider objectives in reforming the law, including the prevention
of crime and disorder; fairness in gambling; and protecting children
and the vulnerable. The creation of a new Gambling Commission,
responsible for licensing and regulating most gambling activities,
the oversight of the Government's social objectives and the development
of codes of practice for the industry and local authorities will
bring much needed transparency and flexibility to the system.
4. DRAFT GAMBLING
BILL
4.1 PPE would encourage the Government to
publish the remaining clauses of the Bill as quickly as possible.
The current lack of information on the Government's proposals
in respect of advertising, promotion, gambling in clubs and transitional
arrangements means PPE's submission is, to a certain extent, incomplete
and subject to caveat.
5. COMMENTS AND
OBSERVATIONS
PPE broadly welcomes most of the proposed changes
outlined in the draft Gambling Bill but in accordance with the
invitation by the Joint Committee offers the following initial
comments and observations.
5.1 Planning Issues—If large scale
capital investment is to be encouraged in projects that will generate
opportunities for major economic development, it is important
that there is a clear understanding and appreciation at the Regional
level of the benefits that casinos incorporating major resort
style facilities ie large scale entertainment/leisure/retail components,
will deliver. We would hope that a distinction is drawn between
the manner in which local authorities will treat applications
for large resort casinos and large casinos without these amenities.
Due to the profitability of slot machines, the proposed legislation
is likely to create a situation where operators will attempt to
gain licenses or modify existing licences for casinos with the
minimum of 40 tables games, 1,000-2,000 slot machines and few,
if any, additional amenities. The capital invested in these facilities
would be much lower than for a resort casino and the overall economic
benefit to the community would be significantly less. These "shed
casinos" will compete directly with resort casinos and if
they are allowed to proliferate will probably severely limit the
development of true resort style casinos and their attendant economic
benefits.
PPE would therefore recommend that the legislation
be amended such that all casinos of 10,000 sq ft or more, and
having 40 or more table games, are of "regional significance"
and their location/approval should be the subject of the regional
spatial strategies and local development plans of the Regional
Planning Boards.
5.2 Machine-Table Ratios—PPE believes
the proposed machine ratio will adequately limit the proliferation
of machines in unsuitable locations and are strongly in favour
of this control
5.3 Floor Size and Grandfather Rights—The
minimum floor size of 5,000 sq ft, which will go some way towards
discouraging proliferation of casinos, especially in unsuitable
locations. We remain concerned that existing UK operators may
get licences to create 10,000 sq ft plus facilities before the
Bill receives Royal Assent; and then convert them into "shed
casinos" using Grandfather Rights granted under the new Act.
This could again impact the viability of large resort style casinos
and their potential for economic development.
5.4 Linked Machines—PPE is pleased
to note that the prohibition on linked machines is included in
the primary legislation. By limiting the availability of high
jackpots to large casinos it removes any possibility of these
machines being placed in unsuitable locations.
5.5 Issuance of Credit in Casinos—The
Bill as drafted contemplates a continuing prohibition on the issuance
of credit for casino gaming. This prohibition would place UK casinos
at a considerable disadvantage to their international competition.
The rationale of permitting Betting Operators
and Remote Gambling Operators to issue credit but to prohibit
credit in casinos is also difficult to comprehend. As sports betting
will now be permitted in a casino, a customer of the casino could
be extended credit for betting transactions but not enjoy the
same facility for casino gaming.
PPE would ask the Committee to consider amending
the legislation so as to allow the issuance of credit for casino
gaming and that the Gambling Commission, after consultation with
the industry, should develop a Code of Practice for the granting
of credit in casinos.
6. POINTS OF
CLARIFICATION
PPE requires clarification of a number of the
clauses relating to licensing, definitions and Temporary Use provisions
before it can make any meaningful comments. We have identified
these clauses in the remainder of this submission and also offered
comments on other clauses where appropriate.
6.1 The Gambling Commission
(numbers reference the relevant clause number
in the Gambling Bill)
16—Codes of Practice—We believe
it important that there is consultation with representative groups
before the Commission issues a code of practice. We would expect
that sufficient time is given to allow industry to engage with
issues before the code is introduced.
20—Consultation with National Lottery
Commission—We would like to further clarification of how
a difference of opinion between the Gambling Commission and the
National Lottery Commission will be resolved.
6.2 Operating Licences
51—Nature of licence—We believe
that the term "operating licence" should be further
clarified.
55—Application—We believe the term
"person" in subsection 1 should be extended to include
"an organisation".
56—Consideration of application: General
principles—(c) We do not believe it is necessary or desirable
that the suitability of gaming machines be considered as a factor
in considering an application. Regulations governing the design
and manufacture of machines will be set out elsewhere in the legislation
and manufacturers and operators will adhere to these.
60—General conditions imposed by Commission—Clarification
is required as to the nature of the conditions that may be attached.
61—General Conditions: procedure—(1)
Clarification is required of the grounds that the Commission would
consider amending or revoking a condition. (2) We are concerned
that the terms of consultation are not sufficiently far-reaching,
and would welcome measures to increase the scope of the consultation.
62—Individual condition imposed by Commission—Clarification
is required as to the nature of the conditions that may be attached
to the licence, and on what grounds they may be imposed.
63—Condition imposed by Secretary of State—Clarification
is required as to the nature of the conditions that may be attached
to the licence, and on what grounds they may be imposed.
64—Scope of powers to attach conditions—Clarification
is required as to the nature of the conditions that may be attached
to the licence, and on what grounds they may be imposed.
68—Equipment—We would like further
clarification as to the grounds on which conditions may be made.
In addition we believe that the definition of "equipment"
should be clarified.
71—Casino operating licence—(3)
We would like further clarification as to the nature of the conditions
that may be attached to the licence, and on what grounds they
may be imposed.
79—Change of circumstances—We would
like clarification as to what may be considered a relevant "changes
of circumstance".
87—Initial Duration—We would like
further clarification and detail regarding the initial duration
of operating licences
90—Forfeiture—What is a "relevant
offence" in this context.
92—Review—We believe that more justification
is required for a review under the provisions of Section 2cii.
94—Revocation—(1) We believe that
the phrase "the Commission thinks that" should be amended
to "the Commission has evidence that". (3) We believe
this section should be amended such that the fee is cancelled
if the holder of the licence can show that failure to pay was
due to administrative error.
95—Financial Penalty—(1) We believe
that the phrase "the Commission thinks that" should
be amended to "the Commission has evidence that". (3)
We believe that two years is too long a time period. There seems
no reason why it should take such a long period of time between
the Commission becoming aware of a breech and their taking action.
96—Levy—(5c) We believe that this
clause is too vague and should be expanded upon.
6.3 Personal Licences
102—Exemption for small-scale operators—We
would like further clarification as to why conditions cannot be
attached to the licence of a small-scale operator, particularly
if the Government is concerned about the proliferation of smaller
casinos.
103—Application—We would like further
clarification of this section. Sections 1, 2 and 3 imply that
an applicant must have an employer in order to attain a personal
licence, which contradicts section 4.
107—Production of licence—(1) We
believe that the wide variation between the requirements contained
in a, b and c will cause huge confusion. We would recommend (a)
as our preferred option as we do not consider it practical for
all members of staff to carry their licences with them at all
times.
110—Disqualification—We would like
further clarification on what grounds a court will be able to
order the forfeiture of an individual's personal licence.
6.4 Operating and Personal Licences: Appeals
114—The Gambling Appeal Tribunal—We
believe clarification is required as to whether the onus of evidence
in appeal cases is on the licensee or the Gambling Appeal Tribunal.
120—Rules—We would like clarification
of the grounds upon which the Secretary of State will have the
right to intervene.
6.5 Premises Licences
124—Three-year licensing policy—(3c)
We would like clarification as to how much weight interested parties
will have. We strongly believe that due regard must be given to
weighting interests. (4) We would like further clarification of
the regulations that may be made in this section.
128—Responsible authorities—(1i)
We would like further information regarding whom could be included
as a result of this clause and for what reasons.
129—Interested party—(a) We would
like clarification as to how it will be determined that a person
lives "sufficiently close" and on what grounds they
will be considered to be "affected by the authorised activities".
(b) We would like further clarification on how it will be determined
that someone's business interests are affected.
141—Casino premises licence—(4)
It is unclear why section 4c is necessary given that 4a and 4b
taken together authorise the holder of casino premises license
to use the premises for both bingo and betting.
153—Initial duration—We would like
further clarification regarding the length of the period between
the Secretary of State issuing a prescription and the licence
expiring.
155—Revocation for failure to pay fee—(2)
We believe this section should be changed so that the fee is cancelled
if the holder of the licence can show that failure to pay was
due to administrative error.
156—Lapse—(1a) We do not believe
that a premises licence should automatically lapse if the licensee
dies. Instead, the possibility should be allowed for the licence
to be transferred to a named successor.
159—Application for review—(3)—We
would like further clarification as to the length of the notice
period.
168—Rights of appeal—We would like
further clarification as to whether the objections raised at the
appeal stage can be the same as those raised originally. Our concern
is that it would be possible for one objector to inflict considerable
delays on the process without any real grounds.
6.6 Temporary Use of Premises
We are unconvinced of the need for temporary
licences. We are concerned the measures contained in this section
could encourage the proliferation of gambling through the emergence
of "mobile casinos". If these measures are included
in the Bill, it will be necessary to clearly define the activities
of a "temporary licencee".
6.7 Gaming Machines
192—Gaming machine—(2d) this requires
clarification.
193—Gaming machines Categories A to D—(2)—when
will these regulations be made available?
197—Use of machine—We believe further
clarification is required regarding the extent to which the Secretary
of State will make regulations and the likely nature of these
regulations.
198—Supply, etc—We would welcome
further details about the likely nature of the regulations.
6.8 Category D Gaming Machine Permits
Making of an application (3a)—We would
like further clarification of this clause, as it is unclear why
a permit cannot be applied for if an alcohol licence has effect
in respect of the premises.
December 2003
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