RESPONSE TO THE
JOINT STATEMENT BY MINISTER WITH RESPONSIBILITY FOR GAMBLING AND
PLANNING MINISTER
Introduction
1. The COA(UK) responds
to the Joint Statement made on 7 August by Ministers Lord McIntosh
and Mr Keith Hill MP. It is acknowledged that the statement was
offered as a basis for consultation. However, this Association
considers that it misses substantially its declared core aim of
a balanced, predictable way forward which both encompasses workable
"grandfather rights" for existing casinos, as well as
opening the doors to unprecedented expansion without unacceptable
risk.
Background
2. The factors which
go to make up the nature of the British casino industry are complex
and mostly inter-related, and the COA(UK) has already commented
upon most of them in previous submissions.. However, this response
seeks to address as closely as possible the specific issues that
the detail of the Joint Statement raises. In so doing we recognise
the difficulty of consistency and logic of approach that the Departments
have sought to resolve within the conundrum of seeking to minimise
any harmful effects whilst contemplating much larger and re-shaped
industry. Further, this is to be done whilst still trying to retain
the characteristics of table-game orientated casinos rather than
machine palaces.
3. The Statement recognises
that the addictive nature of machines is driven by two major factors;
numbers and accessibility. These, together with table-game floorspace
and planning input (both local and regional) are the major ingredients
of the mix put forward to regulate proliferation, limit collateral
damage, and at the same time promote the supersize resort or destination
casino.
4. One further area
of uncertainty needs clarification; how the chosen, implemented
system would be changed equitably should the proposals fail to
achieve the desired outcome, whether proliferation or undue constraint.
In short, will we be left with a series of changed situations
with unfair and different parameters or various grandfather rights?
We need clarity of retrieval, in addition to well thought-out
entry conditions.
5. Our response therefore
addresses the likely effectiveness of the proposals in achieving
these disparate goals, tries to identify anomalies and, where
possible, suggests modification to the proposals.
/continued….
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6. Currently it is difficult
to reconcile:
· massive
expansion but no increase in problem gambling as a declared startpoint;
· insistence
on a Gambling Industry Charitable Trust to counter problem gambling
whilst ensuring that the NHS involvement is peripheral; both must
be involved;
· the
suggestion that small casinos per se are hard to regulate effectively
does not seem to be borne out by the major irregularities in recent
years predominantly occurring within large companies. However,
it is readily acknowledged that proliferation will in itself produce
problems unless the capacity of the Gambling Commission is sufficient
and the industry can generate sufficient staff members of quality.
· hence
the constant advice from this Association that a strong Commission
and controlled expansion are fundamental to success, if success
is in part to be measured by not destroying the current industry.
7. The statement that
government wish to enable consumer choice to be widened with the
ability to compete in an increasingly global market is laudable
in itself. However, an expanded industry would need a greater
expanded customer base to provide the servicing of the investment.
How that will be provided is perhaps a commercial decision, but,
· despite
an increase in gambling awareness stimulated by the National Lottery,
there is no groundswell of public clamour for more and larger
casinos;
· the
Lottery itself is waning; would the same happen to casinos?
· gambling
is not an industry that can be left solely to market forces;
· the
conditions which have allowed the take-off of casinos in other
jurisdictions are not readily available in the UK, such as:
4 monopoly
situations
4 favourable,
discriminatory, very low taxation
4 willingness
of customers to travel (15 miles is about the current UK average)
· It
is obvious that despite restrictive current regulations, some
towns are already, in terms of viability, over-provided with casinos;
· a
complete change in the British public psyche is needed to support
a strong casino industry which is capable of underpinning in turn
an internationally aligned element of its customer base.
8. There is therefore
the danger that, instead of a smooth transition to an enlarged
industry, it is beset with a series of speculative openings and
unnecessary closures in the early years, followed about ten years
later by a further shake-up as investors pull out from an over-expanded
estate. The key must lie in the balance of the control measures
to be implemented from the outset.
/continued ….
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Taxation
9. The as yet unknown
taxation policy is crucial in assessing the effect of other measures.
The Proposals
10. The Joint Statement,
in putting forward the way in which the control and targeted impact
of casinos can be achieved when the current cross-section of controls
is swept away, is couched in cautious and restrictive terms. That
in itself is a rewarding position which has moved markedly from
the "Las Vegas everywhere" when Budd was first announced.
The COA(UK) is pleased to see this measured style, but regrets
that at the same time the proposals do not provide the balanced
startpoint that the Statement seeks.
11. The proposals focus
on the extremes of the sector and in effect leaves no graduated
response available to the markets and customer preferences in
between. Saying that the market will determine the number, size
and character of casinos save the very largest complexes, requires
the highest levels of knowledge and understanding by planners
of the casino industry and its effects if the market is not to
produce the very thing that legislation up to now has achieved
- minimum business failures and the subsequent recovery of the
local economy. There is the capability for good if we get it right,
and considerable pain if we get it wrong.
12. This appraisal must
also be looked at in time frame because the striving for expansion
can only occur successfully if a much larger proportion of the
British public change their lifestyle to embrace the casino package
- and, if it is to happen, it will take time measured in years.
It would be irresponsible to damage the existing industry and
its growth whilst seeking to put in place a reliable, large-scale
series of resort or destination casinos with unproven performance
within the UK environment. This is why the balance of restrictions
and freedoms within the anti-proliferation measures is so important.
Casino Size
Large Casinos
13. In promoting the
large-scale end of the market and seeking massive inward investment,
the Joint Statement has consciously upset the balance that was
emerging to provide controlled, measured change, and in its place
put forward the formula favourable to big business. Whether it
is favourable to the British public who, directly or indirectly,
would have to pick up the pieces should things go wrong, does
not appear to register quite so highly. Of course such large projects
need serious consideration and encouragement if they are worthwhile
and are to succeed. But part of that formula is the culture change
recognised by the Ministers in putting forward the magic ingredient
of unlimited machine numbers relative to small numbers of tables
- and its attendant problem gambling dangers.
/continued ….
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Smaller Casinos
14. Happily for large
casinos, the other end of the equation provides further incentive
in that smaller casinos are proposed to be restricted to three
machines per table. This overturns the years of deliberations
and concurrence of concerned agencies such as GamCare and Gordon
House that eight machines per table was an acceptable initial
balance between providing for the market and maintaining a sensible
"non-machine palace" development.
15. As such machines
will provide an impact on casino operations in this country hitherto
unseen, the effect of these new proposals will be to reduce the
competitive capability of current casinos, leaving the door open
even wider for the big companies.
16. In one stroke, under
the banner of reducing the accessibility of machines on the high
street, a huge surge in machines is provided for and the irritation
of large companies with small competitors - an acknowledged feature
of big business, especially when the competition is successful
- is removed by denying the small operator a major means of his
competitiveness in the new market. Why should the current customers
be denied their choice of a smaller, hands-on casino operation
which is attuned to their preferences because, for the wrong reasons,
the casino can no longer compete?
17. Not surprisingly,
independent operators within the "grandfather rights"
proposals, especially those without the ability to expand their
casino size, see the 3:1 machine table ratio not as a relaxation
but as a means to drive them out. Further, those with the capacity
to expand their tablegame floor area to meet the required standard
for new casinos of 5,000 sq ft should not be penalised by having
to go through the planning process for permission. They have proven
their operation and should not have further embargos or restrictions
put upon them in meeting new standards
18. Equally, the proposals,
with the "precipice bond" approach to machine and table
numbers below 41 tables and the 5,000 to 10,000 square feet table
gaming areas, do not (as presently understood) provide the flexibility
to permit a graduated mix of casino facets as well as providing
a credible deterrence against casino proliferation.
Planning for Casinos
19. The circumspection
with which the casino industry views the move from Licensing Justices
to Local Authority licensing needs no reiteration here. The proposed
involvement of Regional Planning Bodies could be a step towards
a more coherent expansion of the industry, but equally it could
also prove to be another layer of conflict and planning hurdles.
The relationship with and authority of the Gambling Commission
again becomes crucial in the role that planning can play. That
inter-relationship will need further definition at local level
where disparate views on the local implementation of differing
policies for the blend (or restriction) of smaller, larger and
resort or destination casinos may be contemplated.
/continued ….
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COA(UK) Proposals
20. It is therefore
proposed that the startpoint for current operations and the introduction
of new operations be rebalanced as follows:
· grandfather
rights be implemented; they should also include the right to expand
the table gaming floor area up to 5,000 sq ft if they so wish;
· thereafter
the 5,000 square feet minimum table games area be introduced exclusively
for table games. It would not be necessary to fill the area with
tables but neither should it be utilised for other elements such
as machines, bars, bingo, entertainment etc;
· above
5,000 and up to 10,000 square feet the area must contain the minimum
5,000 square feet dedicated to tables but thereafter the remaining
area may be utilised in a mix at management's discretion to meet
their specific market;
· if
the casino wishes to deploy a table gaming area in excess of 10,000
square feet, then the first 10,000 square feet must be filled
with tables at the average table area of, say, 160 square feet
each i.e. 62 tables. Again the remainder may be utilised at management
discretion;
· at
the above three levels the table to machine ratio should be at
the 1:8 level until the nominal 62 table level is exceeded when
it moves to unlimited. This would have the effect of moving the
onset of unlimited machine casinos from 40 tables to 320 machines
to 62 tables to 496 machines - large enough for any major investment
short of resort/destination casino size where a minimum of 1500
machines may be expected;
· all
tables to be manned at manning levels capable of proper operation.
The purchase of tables alone should not provide the basis of meeting
table to machine ratios;
· the
role of the Gambling Commission in the planning process be again
considered. There would appear to be a continuing advisory role
of which planning should take account. The strengthening of those
powers in certain circumstances to a mandatory function seems
necessary if a national overview is to be sustained.
Differing Position
21. One COA(UK) member,
Aspinalls, does not agree that the transitional level to unlimited
machines should be 62 tables, but should be 40 tables.
B J Lemon
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