Annex
EMERGING GAMBLING
LEGISLATION
Your willingness on 21 May, both to listen and
engage in general discussion about the issues we raised and the
questions we posed was greatly appreciated. Please pass on my
thanks to your colleague.
You will understand, I am sure, that the emerging
legislation will have far reaching implications for Blackpool.
As yet, it is unclear whether these will be positive and associated
with major development or negative and associated with further
decline of our traditional resort product. It is against this
background that we are seeking to improve our understanding both
of the emerging legislation and the casino landscape it may create
in this country.
GAMBLING LEGISLATION
AND THE
PLANNING SYSTEM
I outlined Blackpool's concerns relating to
the above and let you know of my intention to write to Michael
Bach at ODPM. I have attached a copy of my letter to Michael,
together with a paper, forwarded to the Joint Committee, after
the evidence sessions ended. There is also a recent letter to
the Blackpool MP, Gordon Marsden, which was prompted by Yvette
Cooper's evidence to the Joint Committee.
I do hope that these enclosures will help you
to recognise that Blackpool has taken a thoughtful position on
the liberalisation of gambling and shares with Ministers their
wish to avoid proliferation, impulse gambling and the attendant
social problems. You may also find that my letter will generate
some useful thoughts.
THE TIMING
OF THE
GAMBLING ACT
AND CASINO
PERMISSIONS
The Budd report demonstrated that it is futile
to resist growth in gambling in a mature society engaged in Information
Technology. Against this background my Council has therefore looked
carefully at the emerging Gambling legislation and the Planning
Acts. It has looked for measures that will arm both licensing
and planning authorities with the means to manage this growth,
avoid proliferation and capture regeneration benefits.
Concerns about proliferation relate to accessibility
to potentially harmful forms of gambling and particularly to machine
gambling. My Council would, therefore, define proliferation as
a pattern of opportunity, a conspicuous, "door step"
convenience, that is likely to give rise to high levels and regular
patterns of participation that are harmful both to individuals
and local communities. It therefore favours a regulatory device
that will produce few large, rather than many small casinos.
Blackpool also favours a "clustered"
approach, and the opportunities it brings to link gaming to an
overall, urban renewal program—commercially, culturally
and economically.
There are powerful cost, business development,
social, and regulatory advantages. The cluster forms a destination
and will attract an out of town customer base and potential overseas
customer, as opposed to local drive-in customers. In this environment
the destination casino is largely used by a visitor population
that has made a conscious decisions to make a dedicated trip as
part of a wider leisure experience. Research shows that 75% of
Blackpool's customer base will live outside the Granada TV region.
The out of town customer takes a short break,
leading to ancillary business such as conventions, hotels, food
and beverage and non-gaming options. The cluster is much easier
to oversee/regulate and the many fixed operating costs are also
scalable across more than one casino property and, indeed, across
the entire renewal area.
Blackpool supports the view that a free market
in the provision of casinos will produce many casinos in a widely
distributed pattern, because investment will focus on supplying
customers as cheaply as possible and as close as possible to where
they live and work. US research shows that casino catchments will
be relatively local and participation rates will be as high as
30% of the catchment populations in this "distributed"
casino landscape. The catchment population will gamble in the
casino more frequently, because marketing and promotion campaigns
will seek to excite this catchment population rather than a national/international
leisure seeker. There will be greater displacement of casino spending
and a questionable local benefit.
The evidence presented to the Joint Committee
suggests that Government wishes to create a regulatory environment
that will keep the expansion in casinos within a number that feels
acceptable. Its ideal scenario is, I am sure, a casino landscape
featuring small and large casinos that will capture the benefits
of regeneration and avoid proliferation.
Blackpool Council is fearful that Government
will produce a regulatory device that is well intentioned but
is burdened by complexity and loopholes and will produce what
Government fears most, which is; too many casinos; too little
regeneration benefit in the right places; and too many negative,
social impacts.
At this time, Blackpool is not an investment
target for the major US operators. In the absence of any guidelines
directing resort casinos to resort locations like Blackpool the
operators are focusing on a distributed approach, and on "local
drive-in markets" served by highly accessible sites within
the major urban conurbations. Here, we have a market determined
approach undermining a national regeneration agenda. These same
operators have, of course, let Blackpool know that it is still
within their sights and will become a priority investment location
if there is national guidance, clear, strategic development policies
and an associated regulatory environment.
CLEAR BLUE
WATER
Blackpool Council would plead for simplicity
and a regulatory environment that is:
— built upon a solid and sensible link
between the licensing and planning processes.
— is designed to ensure that, "Casinos
as part of large tourism development can make a significant contribution
to the local economy especially in areas that depend on tourism
and need regeneration." Minister, Keith Hill.
My Council would advocate two categories of
casino that are clearly differentiated, with the larger casinos
having the scale and presence to compete internationally, appeal
to a Euro spending customer and produce a net gain to the exchequer.
It would also advocate a regulatory environment
that signals the Government's wish to see an existing and very
British product evolve and grow in number in a measured and cautious
way. Blackpool favours an expansion in the number of casinos based
on few large, rather than many small casinos, and a planned pattern
of development that realises the ambition contained in the statement
made by Minister, Keith Hill.
This differentiation could be expressed in many
ways. Blackpool's suggestion is as follows:
|
| Casino Category | Gaming Area (msq)
| No of tables | Table:Machine Ratio
|
|
| Boutique | 500-1,000
| 20-40 | 1:3
|
|
(It will be necessary to give the regulatory body the power to
curtail or encourage investment in this sector by adjusting the
table:machine ratio and policing overall numbers to avoid the
dangers of proliferation and its attendant problems.)
|
| Clear Blue Water | |
| |
|
| Destination | >15,000
| 60-100 | 1:20
|
| Destination | >1,500
| 60-100 | 1:20
|
|
(There will need to be a definition of the Destination/Resort
casino in terms of its make-up and its expected contribution to
regeneration. There will also need to be national guidance on
priority locations and a clear role for the Regional Planning
Body in delivering the regeneration benefits in accordance with
this national guidance.
Blackpool would define a destination casino as an entertainment
complex providing a variety of gambling and gaming opportunities,
hotel accommodation, conferencing, live entertainment, food and
beverage, and perhaps, specialty retailing, health and fitness
suites, night club and spa, developed as an integral part of a
wider leisure experience.)
If the Government's three original objectives are to be achieved
and areas that depend upon tourism and are in need of regeneration
are to benefit then it is essential that there is:
— clear national guidance on regeneration priorities;
— casinos are given sui generis status in the Planning
System;
— planning permissions are regarded as an essential
pre-entry qualification to the premises licensing procedure.
— applications for premises licenses should only
be accepted for consideration if the necessary planning permission
post dates the gambling act and the relevant regional/national
casino development guidance.
I do hope that you will be able to give this letter your
serious consideration and will be able to let me know of your
response to the issues and ideas it raises.
May 2004
EMERGING GAMBLING
LEGISLATION AND
THE PLANNING
SYSTEM
I do hope that you can recall our recent telephone conversation
relating to the above, the concerns I expressed about the proposed
changes to the Use Classes Order and, in particular, the retention
of casinos within Use Class D2. As you know, the Joint Committee
on Gambling Legislation, chaired by John Greenway, has also expressed
this concern.
During our conversation you stated that the ODPM does not
wish to become involved in the micro management of casinos. You
also indicated that you have consulted widely on the proposed
changes to the Use Classes Order and this has revealed that the
existing casino industry does not wish to see casinos removed
from Use Class D2. You expressed the view that against this background
the Department is reluctant to make further changes to the Order.
This is surprising given the peculiar nature of casinos,
the machine orientated form they will take in a liberalised environment,
and decisions made in the past to place amusement arcades in a
sui generis category and more recently, of course, to leave
this categorisation unchanged.
It is important to recognise that during the period January
2002 to April 2002, when views on possible changes to the Use
Classes Order were invited, local councils were simply not familiar
with the extent or nature of the changes that could take place
in the casino market as a consequence of gambling liberalisation.
Furthermore, Councils did not have any indication of the possible
reactions of the gambling industry to liberalisation and the development
scenarios that might emerge. Since that time awareness has been
growing as the debate has acquired knowledge and momentum in both
the public and private sectors. The regeneration imperative has
emerged, there has been a great deal of discussion about the need
for a sensible relationship between gambling and planning legislation
and many organisations, including my own, have assumed that issues
relating to the Use Classes Order would be resolved in a joined-up
and constructive way.
BLACKPOOL'S
EVIDENCE TO
THE JOINT
COMMITTEE
You will be familiar with the evidence that was presented
to the Joint Committee, its report and recommendations, and the
references made in its report to the submissions made on behalf
of Blackpool Borough Council. These make specific reference to
potential issues arising from the timing of planning permissions
and the enactment of the gambling bill, and the inclusion of casinos
in Use Class D2. The enclosed paper, forwarded to the Joint Committee,
after the evidence sessions ended, and my letters to the Blackpool
MP, Gordon Marsden and Chris Bone at DCMS, set out Blackpool's
position.
Clearly, I am aware of:
— the Deputy Prime Minister's wish to see regeneration
benefits flow from the new legislation;
— the position that has been taken by Minister,
Keith Hill as quoted below, "Planning Bodies will promote
economic growth, development and regeneration in the right places.
Casinos as part of large tourism development can make a significant
contribution to the local economy especially in areas that depend
on tourism and need regeneration. I want to see Regional Planning
bodies help give such areas a boost through tourism-led regeneration.";
and
— the belief within the ODPM that the Planning and
Compulsory Purchase Act creates a legislative environment, that
will allow the regions in England to guide and control the spatial
pattern of regionally significant casinos.
My Council welcomes the position taken by the ODPM on regeneration,
and, indeed, the general position taken by the Joint Committee
on Gambling. It is fearful, however, that the necessary planning
systems and procedures will not be in place early enough and will
not be well enough armed to secure the desired outcomes.
CAPTURING THE
REGENERATION BENEFITS
AND AVOIDING
PROLIFERATION
My Council wishes to see clear direction at regional level
and a robust process that will deliver the favoured development
patterns and associated economic and social benefits. It is, however,
concerned that the hugely significant, potential benefits of a
plan led system at regional level will be undermined by the reluctance
to remove casinos from Use Class D2. It is also concerned that
this reluctance will undermine attempts to avoid proliferation.
My Council has defined proliferation as a pattern of opportunity,
a conspicuous, "door step" convenience, that is likely
to give rise to high levels and regular patterns of gambling that
are harmful both to individuals and local communities.
At the heart of this concern is the proposal in the Gambling
Bill to remove the current spatial controls, imposed by the licensing
system through the "designated areas" provisions and
the unstimulated demand test, and to replace these with the three
licensing objectives without any clear intention to create sensible
links between the Gambling Bill and the Town and Country Planning
system.
The three objectives are to become central to the scheme
of gambling regulation. They will seek to ensure that:
— gambling is not associated with crime or disorder;
— gambling is conducted in a fair and open way;
and
— the vulnerable are not harmed or exploited by
gambling.
The casino market is highly lucrative, pressure will be placed
on Councils and it would be imprudent to assume that the intent
of the legislation will be respected and obvious loopholes will
not be exploited. It is also necessary to recognise that the Gambling
Act is likely to give rise to an intense but short lived, period
of development and the benefits could easily be wasted by a sluggish
and shorted sighted planning system.
Ministers are concerned about the proliferation of convenient,
"door step" casinos, and the unwelcome social problems
this will bring. Yet the scheme of regulation will confine the
consideration of applications for casino licences made in respect
of the operator and thereafter the premises to the areas covered
by the three objectives. There will be no economic, social or
environmental impact assessment. Worryingly, it will only be possible
to address these omissions and steer development and investment
in the way envisaged by the Minister, Keith Hill, where planning
permission is required.
In Blackpool the Statutory local plan designates a casino
development zone and requires the submission of supporting social,
economic and environmental impact studies. This approach makes
sense in so many ways but will become ineffective window dressing,
if operators can pursue developments outside the zone without
any recall to the planning system.
THE IMPORTANCE
OF A
SUI GENERIS
STATUS FOR
CASINOS
Clearly, if the Use Classes Order remains unchanged planning
permission will not be required where changes of use that create
casinos take place within Use Class D2. The potential to create
the doorstep gambling that Government does not wish to see will
be enormous.
Within the casino industry it is common knowledge that Rank
will seek to convert 60 bingo halls into casinos. The Chief Executive
of Bannatyne stated at a recent conference in Edinburgh that the
Health and Fitness market was mature, that there was over provision
and that his company will seek to address this situation and grow
income by converting health and fitness centres to casinos. The
cinema and night club markets are also mature and operators are
facing the same issues and considering the same opportunities
as Bannatyne. I am sure that you and your colleagues in the ODPM,
could cite many more examples of potential for unregulated, land
use change within Use Class D2 and proliferation of casino gambling.
There are also real dangers in respect of regionally significant
casino development. An international operator could, for example,
purchase a chain of cinemas and establish a pattern of resort
casino development without reference to the regional planning
bodies or their plan led, regeneration strategies. Here, there
is an opportunity to avoid the legal agreements that will be attached
to planning permissions for the largest casinos and a compelling
financial incentive to use the loop holes.
This could also occur in other ways. For example, the North
West region could decide that resort casinos are to be located
in Liverpool and Blackpool. Other areas in the region with investment
ambitions and very limited resources could feel aggrieved. A proposal
in one of these areas, to develop a large scale leisure building,
including cinema, bingo, health and fitness, sport and recreation
uses and, perhaps, a small casino is submitted and approved. The
development is completed, and the Council is presented with a
prospect of further development bringing associated "public
good" and a resort casino within the original development
that can be introduced without the need for a resort casino, planning
permissions or reference to the regional planning body and its
regeneration test.
THE TIMING
OF THE
GAMBLING ACT
AND CASINO
PERMISSIONS
Clearly, if there is to be a sensible relationship between
the Gambling Act and the Planning System, and there are to be
effective Regional Policies that will capture the regeneration
benefits then:
— planning permission must be regarded as a necessary
entry qualification to the premises licensing procedure; and
— planning permission granted in advance of the
Gambling Act and regional/national development guidance should
not provide entry to the premises licensing procedure.
MANAGING CASINO
DEVELOPMENT
I do hope that you will be able to give this letter and its
enclosures your detailed consideration and will recognise that:
— the planning system has a legitimate and very
significant role to play in capturing regeneration benefits;
— the Use Classes Order does present an obstacle
that will seriously dull the effectiveness of the planning system;
and
— there is a need to address the timing issue and
determine an operational date for a linked planning and licensing
process.
I also hope that you will be able to reply to this letter
by responding to the issues it raises and describes.
| 
