Joint Committee on the Draft Gambling Bill First Report


3 Regional casinos

Resort to Regional

14. The largest casinos were previously widely referred to (although not defined as such by the Department for Culture, Media and Sport) as resort casinos, but in its latest policy proposals the Government has used the term regional casinos. Lord McIntosh of Haringey explained why: "'regional casinos' describes who will be responsible for making them possible; in other words, for deciding which areas are suitable for them. 'Resort' somehow gives the impression of sun, sea and sex".[10] The Union of Shop Distributive and Allied Workers welcome the change: "we are pleased that the Government has effectively rejected the term 'resort casino' in favour of the more realistic term of 'regional casino' for very large casinos".[11] The change in name, while designed to accommodate large scale casino developments outside coastal resorts, has not been universally welcomed. Mr Dave Allen, Chairman of A&S Leisure, said that "there is a massive difference [between resort and regional]. Resort casinos are on the coast. Regional casinos you can implant where there are casinos already existing".[12] Sir Peter Hall, Professor of Planning at the Bartlett School of Planning, University College, London, noted that "by replacing the term 'resort casino' by 'regional casino', the Government has blurred a critical distinction. A 'resort' casino, or 'destination casino', is or should be located so as to attract staying visitors who will spend more than one night, not only gambling but also enjoying a range of other entertainment".[13] Whilst this may not necessarily be true of some casinos in major cities like London, we nevertheless agree with the view expressed by Sir Peter Hall that such casinos should be large leisure complexes, attracting staying visitors from a wide radius.

15. While we appreciate that the term 'resort' does not accommodate casinos outside coastal resorts we do not feel that the 'regional' label is particularly helpful in describing the fundamental nature of the very largest casinos. As we discuss below, we expect regional casinos to be large scale entertainment complexes offering gambling alongside a wide range of non-gambling facilities. This concept is not adequately captured by the current classification. We therefore recommend that the Department considers an alternative name for this category of casino, which more accurately conveys the nature of such developments. The Committee is minded to suggest that the term leisure destination casino more suitably describes the Government's proposals and reflects the Committee's thinking.

Defining regional casinos: has the Government got it right?

The minimum size threshold

16. Much of the evidence we have received has focussed on the definition of regional/leisure destination casinos and whether the Government has got it right. There is general support for the introduction of a third class of casino. Leisure Parcs "welcome the identification of a third new category of casino, that of a 'regional' casino".[14] This view is shared by MGM Mirage Development,[15] Manchester City Council,[16] St Helens Metropolitan Borough Council[17] and Kerzner International.[18] There is some support for the Government's proposed minimum size threshold. For example, Leisure Parcs believe that "the definition of a 'regional' casino on the basis of the minimum sizes stated for gambling and other public areas is appropriate".[19]

17. There is concern, however, that the proposed minimum size threshold for regional/leisure destination casinos is too low to prevent their proliferation. NERA Economic Consulting "doubt whether the proposed criteria for the dimensions of the regional casinos will themselves be sufficient to prevent the wide scale development of such casinos".[20] In their submission, Rank note that:

"According to projections made by Rank Group and others [the Government's definition of regional/leisure destination casinos] would result in between 30 and 50 […] being built. Given the Government's concerns over machine proliferation, this is presumably more than the Government itself envisaged".[21]

The Bingo Association also consider that "the Regional Casino limits are too low. If the Government has concerns over the proliferation of large casinos it should be pointed out that the total of 5000m² can easily be provided. Indeed this limit will actually encourage the building of such casinos in larger numbers than envisaged".[22]

18. Under the Government's proposals the minimum table gaming area for large and regional/leisure destination casinos is the same. As Mr Kelly noted "relative to the sizes of other casinos, this [the definition of regional/leisure destination casinos] is not significantly differentiated".[23] We heard evidence that in order for the concept of regional/leisure destination casinos to succeed there needs to be "clear blue water" between regional/leisure destination and large casinos. Blackpool Council, for example, "advocate 2 categories of casino that are clearly differentiated".[24]

Another cliff-edge?

19. In our original report we were critical of the Government's proposed definition of large casinos and the fact that this could create a "cliff-edge" whereby the gaming machine entitlements for large casinos, compared with small casinos, were so attractive to operators that they could lead to an unnecessary increase in the number of large casinos. We have received evidence suggesting that the Government's new proposals give rise to another "cliff-edge" between large and regional/leisure destination casinos. Large casinos will be able only to offer a significantly reduced gambling product compared to that of regional/leisure destination casinos. They are limited to a maximum of 150 gaming machines, which can only be Category B, C or D. On the other hand the regional/leisure destination casino can have up to 1,250 Category A gaming machines, whilst having the same minimum table gaming area as a large casino.[25] Lady Cobham, Chairman of the British Casino Association told the Committee "I would suggest that [the definition of regional/leisure destination casinos] does create another cliff edge because in summary we would suggest that only significant investment would go into regional casinos because of the imbalance in the product".[26] We have received evidence suggesting that the Government's proposals, rather than limiting the number of regional/leisure destination casinos and therefore the availability of Category A machines, could actually encourage operators to develop regional/leisure destination casinos, to gain the resulting entitlement to Category A machines. Mr Allen told the Committee "there will be very few, if any, large casinos. There will be regional casinos".[27]

How many regional/leisure destination casinos will there be?

20. There has been speculation from a number of witnesses and in a number of written submissions about how many regional/leisure destination casinos there might be under the Government's latest proposals. The Government's objective of limiting the number of premises with Category A machines is, to a degree, dependent on there being a limited number of regional/leisure destination casinos. Lord McIntosh of Haringey told the Committee that the Government does not have an optimum number of casinos in mind.[28] While we accept that the Government may not have a specific number of regional/leisure destination casinos in mind, its policy objective depends on there being a limited number of regional/leisure destination casinos. While we understand the Government's reluctance to specify an appropriate target number of regional/leisure destination casinos, its policy objective depends on limiting their number. It cannot therefore simply be left to the market, as Ministers have suggested.[29] The Hilton Group "believe it is important to limit the number of regional casinos as this will control the proliferation of machines, especially Category A machines […] we recommend that an optimum number of casinos be set by the Government in order to give clarity to the market and help control proliferation".[30]

21. We have received evidence suggesting that there could be a considerable number of regional/leisure destination casinos. Gala believe that the proposals as they currently stand could lead to there being "30 - 50 regional casinos providing 50,000 new category A machines".[31] The British Casino Association note that "foreign operators are forecasting that there will be 20 to 40 regional casino developments".[32] The more regional/leisure destination casinos there are, the more accessible they will be to more people. Mr Haslam, Head of the New Horizons Team at Blackpool Council told the Committee "50 casinos across the UK would probably put 70-80 per cent of the UK population within a 15-20 minute travel time of a casino. For me, that is proliferation".[33] Professor Peter Collins, Director, Centre for the Study of Gambling, University of Salford and Chief Executive of Gamcare said that the accessibility of machines was a key factor affecting their impact on problem gambling: "convenience is the single greatest spur to increase problem gambling".[34]

Getting the definition right

22. The Committee is concerned that the proposed minimum size of regional/leisure destination casinos is too low, both to avoid proliferation and to encourage the development of regional/leisure destination casinos as large scale leisure and entertainment facilities, with the opportunity to create regeneration benefits. One way of overcoming this problem would be to increase the total minimum customer area for a regional/leisure development casino by increasing the minimum size of the non-gambling area. This has been suggested by numerous witnesses. MGM Mirage Development propose that:

"The proposed Minimum Non Gambling Area of 1,500 square metres be increased to 3,500 square metres and, accordingly, that the Minimum Total Customer Area of 5,000 square metres be increased to 7,000 square metres. These measures will have the desired stated policy effects of […] further limiting the numbers of venues housing Category A machines […] and […] encouraging a smaller number of larger venues".[35]

Ameristar believe that "consideration could be given to increasing the minimum floor requirement for non-gaming space in regional casinos to 4,000m². This would result in a minimum overall space of 7,500m², a reasonable size that is still low relative to the actual size of many regional-type casino operations throughout the world".[36]

23. We welcome the Government's attempt at defining a third category of casino. We do not however consider that the proposed definition will entirely succeed in delivering the Government's policy objective of limiting the number of premises with Category A machines. We believe that increasing the minimum total customer area through enlarging the minimum non-gambling area is a sensible approach that will both limit the proliferation of regional/leisure destination casinos and ensure that those that do develop will be large scale leisure complexes providing customers with a significant non-gambling product and maintaining the opportunity for regeneration benefits. We believe that developments consisting of more than one regional/leisure destination casino (often referred to as casino clusters) will still be possible under this definition.

24. We therefore recommend that the minimum total customer area for regional/leisure destination casinos is increased to 7,500m². This will consist of a minimum table gaming area of 1,000m², a minimum additional gambling area of 2,500m² and a minimum non-gambling area of 4,000m². We would expect the non-gambling areas to include leisure and entertainment facilities, consistent with guidance set by the Gambling Commission. We believe that the minimum gambling area is adequate to accommodate 1,250 gaming machines; a gambling area greater than the proposed minimum does not justify increasing the cap on the number of gaming machines. We therefore do not believe it is necessary to increase the maximum number of Category A machines a regional/leisure destination casino is permitted.

25. We believe that increasing the minimum total size for a regional/leisure destination casino will increase the size of the investment required to create such a facility, which in turn may limit the likely number of regional/leisure destination casinos to somewhere around 20 to 25. We believe that it is appropriate to have fewer regional/leisure destination casinos than has been suggested by some of the evidence we have received.

The Non-Gambling Area

26. In defining the three categories of casino, the Government has introduced a welcome new element to the definition in the form of the non-gambling area. Casinos in all three categories are required to have a minimum non-gambling area. The Government's response explains that "the purpose of the non-gambling area requirement is regulatory: in order to provide consumers with an easily accessible area where they can take breaks from gambling, and consider whether they wish to resume playing".[37] The Government also intends that the non-gambling area "could be used by children and others who were either not allowed or did not wish to use the casino's gambling facilities". It will be the responsibility of local authorities "in the light of guidance by the [Gambling] Commission to make sure that access between the gambling and non-gambling areas was convenient in one direction but at the same time properly controlled in the other".[38]

27. We have received mixed evidence on this subject. Some have questioned whether the non-gambling area can meet the aims of providing a break from gambling, whilst also providing additional facilities. Evidence received in a joint submission from the Methodist Church, the Salvation Army, Quaker Action against Alcohol and Drugs and the Evangelical Alliance expresses concern that the Government's policy on non-gambling areas confuses the different objectives behind having a "chill-out" area and mixed leisure facilities: "the former offer breaks from play, whilst the latter are attractions in themselves".[39] Those in favour welcome the opportunity that non-gambling areas give for providing a wider range of facilities and increasing the leisure offer. Business In Sport and Leisure note that "non-gambling areas not only […] provide consumers with somewhere to take a break from gambling, but also […] encourage other entertainment which is very much part of the 'leisure offer'".[40] Ameristar Casinos note that "the overall mix of non-gaming amenities relative to the casino gaming area is a fundamental element that sets this type of property apart and makes it truly a regional leisure destination".[41] We agree.

28. As we expressed in our original report, we are attracted to the idea of large scale casino developments offering additional leisure, entertainment and cultural facilities to shape an overall leisure experience, and strengthening the potential for regeneration to an area. The proposed minimum non-gambling area for regional/leisure destination casinos is 1,500m². We do not believe that this is large enough to ensure that a range of non-gambling facilities will be provided. While we do not wish to prescribe the type of facilities which should be provided we would expect these to include leisure, sports, arts and cultural facilities such as restaurants, swimming pools, fitness centres, skating rinks, and theatres. We do not feel that the proposed minimum non-gambling area is large enough to accommodate suitable leisure, sports, arts and cultural facilities. As we discuss in more detail above, we recommend that the non-gambling area for regional/leisure destination casinos is increased to a minimum of 4,000m² in order to accommodate the entertainment and cultural facilities necessary to provide an overall leisure experience.

Access for children

29. The proposal to allow children into the non-gambling area has proved to be controversial. We have received evidence that casinos, whose primary product is gambling, are not suitable environments for children. Gala argue that:

"The proposals for allowing children access to non gaming areas within casino premises is wholly misguided. We believe that children should not be allowed in casinos at all and the principle is totally contrary to all the sensible protections in current and proposed gambling legislation. Whatever the eventual position on this, Gala will not permit children into its gaming premises".[42]

30. The Transport and General Workers' Union does not consider that there is "any place for children in casino establishments; this includes non-gambling areas".[43] Several submissions have questioned how the proposal to allow children into the non-gambling area fits with the Government's objective of "protecting children and other vulnerable persons from being harmed or exploited by gambling". Leo Management Ltd ask "why […] allow access to [non-gambling areas] to under 18-year olds where the main activity will remain gambling? This is an incentive for the under 18's to visit and wait until they are allowed to rush to the gaming floor […] hardly a protection for children".[44]

31. Those in favour of the proposals argue that regional/leisure destination casinos will be large leisure complexes, offering a range of facilities, including non-gambling facilities that will be attractive to families. Mr Eisner, Vice President of Development, Ameristar Casinos told the Committee "the concept of a non-gambling area really adds to the flavour of the facility as a destination leisure offering and not just a casino like a larger version of existing casinos today".[45]

32. We welcome the Government's intention for regional/leisure destination casinos to be large leisure complexes with a range of gambling and non-gambling facilities. The proposals to allow children access to the non-gambling area must be considered in this context. We share the concerns expressed by those who do not wish to see children having access to casinos and agree with the existing industry that casinos as they operate today are not appropriate places for children. We endorse the Government's objective to "protect children and other vulnerable persons from being harmed or exploited by gambling"[46] and do not believe, under any circumstances, that children should have access to or even be able to see the gambling area. However, provided that our recommendation on the minimum size threshold is adopted, we believe that regional/leisure destination casinos should be completely different entities. While the gambling element of the casino will be a key part, the facilities will be much wider than this, offering a range of non-gambling activities.

33. We therefore support the Government's proposals to allow children into the non-gambling area of regional/leisure destination casinos, provided that there are appropriate barriers and a suitable distance between the gambling and non-gambling areas. To do otherwise would limit the potential for regional/leisure destination casinos to develop as all-round facilities, offering entertainment and leisure facilities to those who do not wish to gamble, including families, as well as those who do.

34. We do not believe however that children should be permitted into the non-gambling areas of small and large casinos as these will be too small to offer the range of facilities available in the non-gambling area of a regional/leisure destination casino and to ensure that a suitable distance can be maintained from the gambling area.

Enforcing the separation of the gambling and non-gambling areas

35. The proposal to admit children and "others who were either not allowed or did not wish to use the casino's gambling facilities"[47] to the non-gambling area within a casino places a great importance on the effectiveness of the separation between the gambling and non-gambling areas.

36. The Government propose making local authorities responsible for enforcing the separation between the gambling and non-gambling areas, in accordance with guidance from the Gambling Commission. Mr Nathan, Managing Director, Europe, MGM Mirage Development, told the Committee that it was appropriate that:

"Both [local authorities and the Gambling Commission] should be involved. I think that local authorities would work with the casinos to ensure that the applicable planning requirements are being complied with and I think the Gambling Commission should ensure that the appropriate licensing conditions are being complied with".[48]

37. We recommend that the primary responsibility for enforcing the separation of the gambling and non-gambling area should rest with the Gambling Commission, in line with the licensing objective to protect children and the vulnerable. We expect the Commission to work with local authorities who grant premises licences and to issue guidance setting out the kinds of non-gambling areas that are suitable for children. We so recommend.


10   Q 3 Back

11   Ev 140 Back

12   Q 188 Back

13   Ev 11 Back

14   Ev 125 Back

15   Ev 68 Back

16   Ev 38 Back

17   Ev 145 Back

18   Ev 145 Back

19   Ev 125, paragraph 5 Back

20   Ev 160, paragraph 14 Back

21   Ev 126, paragraph 4.1 Back

22   Ev 164, paragraph 9 Back

23   Q 185 Back

24   Ev 28 Back

25   See Chapter 4 for an explanation of the different categories of gaming machine. Back

26   Q 183 Back

27   Q 187 Back

28   Q 37 Back

29   See for example, Q 18 [Lord McIntosh of Haringey] and Q 325, Q 331 and Q335 [Keith Hill MP] Back

30   Ev 171 Back

31   Ev 55, paragraph 3.2 Back

32   Ev 52, paragraph 6.2 Back

33   Q 131 Back

34   Q 363 Back

35   Ev 68, paragraph 2.4 Back

36   Ev 77, paragraph 2.3 Back

37   Department for Culture, Media and Sport (DCMS), Draft Gambling Bill, Government Response to the First Report of the Joint Committee on the Draft Gambling Bill; Session 2003-2004, Cm. 6253, June 2004, page 30 Back

38   Department for Culture, Media and Sport (DCMS), Draft Gambling Bill, Government Response to the First Report of the Joint Committee on the Draft Gambling Bill; Session 2003-2004, Cm. 6253, June 2004, page 30 Back

39   Ev 147, paragraph 4 Back

40   Ev 143, paragraph 5 Back

41   Ev 77, paragraph 2.3 Back

42   Ev 55, paragraph 3.3 Back

43   Ev 123, paragraph 9 Back

44   Ev 139, paragraph 3 Back

45   Q 271 Back

46   DCMS, Draft Gambling Bill: Policy document, Cm. 6014 - IV, November 2003, para 2.13 Back

47   Department for Culture, Media and Sport (DCMS), Draft Gambling Bill, Government Response to the First Report of the Joint Committee on the Draft Gambling Bill; Session 2003-2004, Cm. 6253, June 2004, page 30 Back

48   Q 284 Back


 
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