Memorandum from Earls Court & Olympia
Group (DGB 39)
1. INTRODUCTION
In October 2003 Earls Court & Olympia Group
announced a development agreement with MGM MIRAGE to develop a
gaming and entertainment complex in part of Olympia Exhibition
Centre, west London. The agreement is in the form of a joint venture
with EC&O taking a 12.5 per cent stake in the new company.
This agreement is of course contingent on both
deregulation and on the achievement of local planning permissions.
Therefore, although a relatively new entrant
to the gaming industry EC&O is taking an active interest in
the passage of the bill and feels that it has a genuine role to
play. We have joined the Cross-Industry Group on Gaming Deregulation,
are attending relevant meetings and conferences and hope to participate
fully in the forthcoming legislative process.
To that end EC&O welcomes the opportunity
to respond to this call for written evidence.
2. ABOUT EC&O
GROUP
Earls Court and Olympia Group is the UK's premier
exhibition venue and organising company. Earls Court & Olympia
Group is part owned by the Morris Family Trust, venture capitalists
Candover Investments, Legal & General Ventures and the Executive
Management team. The Group's primary business functions are to
manage the two west London venues and organise a portfolio of
events.
The group comprises two of the UK's busiest
exhibition, concert and special events venues: London's famous
Earls Court, built in 1937 and Olympia, built in 1886, together
with Clarion Events a wholly-owned organising arm which runs both
consumer and trade shows. Over 170 shows are held in the two venues
each year, attracting over two million visitors and 25,000 exhibiting
companies.
3. EC&O'S
RESPONSE
The Scrutiny Committee has called for brevity.
Given EC&O's status as a minor partner in the actual operation
of any future casino on its site, EC&O will therefore only
respond on matters directly relevant to its own interests (specific
to venue, licensing etc). We will leave experienced operators
such as MGM MIRAGE to comment on detailed operational issues.
For ease of reference the order of EC&O's
response matches with the sequence of points made in the draft
documents. Please note that the three points of most importance
to EC&O are highlighted in grey.
4. GENERAL COMMENTS
As a potential venue for a flagship gaming complex
in London, EC&O Group welcomes the publication of the draft
gambling bill and supports the overall objectives and aims as
first set out in "A Safe Bet for Success" and the 7
August Position Statement.
Gaming is a natural partner to exhibitions/conventions,
creating the second aspect of the perfect triangle of "work,
rest and play". This is where tourism and business income
are generated through visitors attending a business event, then
enjoying leisure activities and finally staying in a hotel: all
in the same local area/complex. America, Australia and South Africa
have all developed the "work, rest and play" concept
successfully and EC&O hopes to be at the vanguard of its introduction
into the UK.
Exhibition venues are unique in the high-level
income multiplier they generate. At present exhibitions held at
Earls Court & Olympia alone generate £1.27 billion in
tourism and business revenue. This includes expenditure by exhibitors
in building and manning their stand together with expenditure
by both exhibitors and visitors in local hotels, bars, restaurants
etc. However, this £1.27 billion does not include the value
of products ordered or business deals struck during the shows
which would increase the total impact greatly.
The prospect of a gaming and entertainment complex
at Olympia alongside the exhibitions business could multiply this
economic impact many times further.
5. SPECIFIC COMMENTS
Draft Gambling Bill—Policy
(a) Paragraph 3.64 Local Authority Powers
EC&O endorses the Government's view that
it is appropriate to set limits on the licensing powers of local
authorities, specifically any powers to institute "blanket
bans" on specific areas. Market forces must be allowed to
play a role in the decision as to where gambling facilities are
located.
(b) Paragraph 5.16 Role of Regional Planning
Bodies
Whilst EC&O agrees with the draft bill that
there is a vital role for Regional Planning Bodies (RPBs) to play,
we would ask that this again be balanced with the acknowledgement
that market forces must also play a role in determining where
casinos might be located. Further, we believe it is important
that RPBs do not confine themselves solely to consideration of
the big resort casinos, they must either have responsibility for
considering them all, or none at all. Unless a level playing field
is created, whereby all casinos are subject to the same scrutiny,
the opportunity to create large gains via redevelopment may be
lost.
(c) Paragraph 5.17 Contributions to local communities
EC&O agrees that consultation with local
communities and contributions, of whatever nature, to the future
of those communities will play a vital role in the agreement of
local planning permissions for new gaming and leisure complexes.
However, in order to ensure that these contributions are fair
and reasonable for both sides we would ask for guidelines to be
set, at national level, on suitable contribution levels—following
consultation with relevant parties. This contribution framework
should cover all casinos.
(d) Paragraph 7.5 Training of Local Authority
Licensing Officers
It is indicated in both the draft bill and policy
that local authorities will take over licensing responsibilities
from local magistrates, as has been agreed in the Licensing Act
2003.
We ask that the Government takes account of
the very considerable training that local authority councillors
and staff will require to properly equip them to deal with a realm
of licensing in respect of which they will have had no previous
experience. It is possible that local authorities are already
being stretched in order to manage the transitional procedures
under the Licensing Act 2003, let alone the licensing responsibilities
which will pass to them on the Licensing Act coming into full
force and effect. This can only be compounded by the arrival of
the future Gambling Act.
The result would be uncertainty, delay and the
incurring of heavy cost on both sides.
In order that the new law can take effect properly
the Government must consider what support it will provide local
authorities to enable them to meet their new responsibilities
in a timely manner.
(e) Paragraph 7.7 Transitional Arrangements
EC&O supports the need for fair competition
between sectors and new entrants versus established operators.
As a new entrant to the market EC&O would hope to see measures
in the new Act which provide an even playing field and equal hearing.
Gambling Bill
(f) Clause 87 Operating licences
EC&O would like to query the proposal for
licences to be issued for a maximum of 10 years as indicated in
Clause 87.
In our view, operating licences should be unlimited
in their duration, subject always to the provisions in the draft
Bill in relation to surrender, lapse, forfeiture, review and revocation.
This would be consistent with the practice in most other and would
also reflect current practice in relation to Certificates of Consent
granted by the Gaming Board to casino operators.
However should the Government decide to pursue
a policy of awarding time specific licences, it is important that
operators have a considerably longer period in which to renew
than the currently specified three months prior to expiry. Three
months would offer successful well-run businesses no ability to
plan effectively for that business in the long term and will provide
absolutely no certainty about the continued existence of their
business until the very last minute.
The resulting uncertainty will actually prohibit
investment in facilities, employment, services etc. This is counterproductive
to the Government's stated aim of encouraging investment in communities
and regeneration.
(g) Clause 124 Consultation
At present the draft Gambling Bill requires
local licensing authorities to consult with the Police, the Fire
Authority and "one or more persons who appear to the authority
likely to be affected by the exercise of the authority's functions
. . ." on Local Authority Licensing Policy. In our view this
does not require Authorities to consult with all interested parties,
but rather a selection of their own choosing and we ask that this
clause be amended to specifically include all relevant businesses
within the authority's area.
(h) Clause 125 Granting of Permission
EC&O is pleased to note that Licensing Authorities
are directed to aim to permit the use of premises for Gambling,
providing that the proposed operation:
(a) accords with codes of practice and guidance
issued by the Gambling Commission;
(b) is reasonably consistent with the licensing
objectives under the Gambling Act (see Clause 1 of the draft Bill);
and
(c) is in accordance with the authority's
three-year licensing policy.
However, given the debate that is likely to
arise in relation to similar provisions within the Licensing Act
2003, it might be helpful to see more clarity in this Clause as
to the relative priorities of each of (a), (b) and (c).
(i) Clauses 166-167 Provisional Statements
The draft Gambling Bill presently provides for
representations/objections to be made at the time of application
for a full premises licence (after a provisional statement has
been granted and on completion of works).
This implies that objections could be made which
delay, restrict or even prevent the opening of the gaming facility
after all works of construction/alteration have been completed
and staff employed.
EC&O is concerned that at this late stage
considerable investment in time, money and effort will have been
expended. We understand that under the Licensing Act 2003, it
is possible for an operator intending to construct new premises
(or alter existing premises to create new licensed premises) to
apply for a "full" premises licence before even starting
works (giving him a level of certainty that he will be able to
open his premises upon completion of the works of construction/alteration)
rather than having to apply for a provisional statement, which
would not provide the same level of certainty. Similar provision
should be made in the Gambling Bill.
The market will need some similar degree of
certainty before large sums are invested, lack of certainty will
almost certainly lead to lower investment.
6. TIMETABLE
As with all things, there is a window of opportunity
where the best gaming operators in the world are interested in
developing facilities in the UK. The world is large and the UK,
whilst important, a relatively small potential gambling market
and it is important that the incentive for change and development
is not bogged down in endless debate and bureaucracy to the extent
that operators lose interest and begin to explore opportunities
elsewhere.
EC&O therefore commends the Government for
its timely work to date and urges Parliament to maintain the current
momentum for change and, subject to the correct consultations
with all interested parties, avoid undue delays in the bill becoming
law.
December 2003
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