Examination of Witnesses (Questions 172
- 179)
TUESDAY 6 JULY 2004
VISCOUNTESS COBHAM,
MR JOHN
KELLY, MR
ANDREW HERD,
MR ANDREW
LOVE AND
MR DAVE
ALLEN
Q172 Chairman: Good afternoon. Can
I begin by welcoming three familiar faces to the Committee and
two new ones? Viscountess Cobham, the chairman of the British
Casino Association, John Kelly, the chairman of Gala who appeared
previously as a member of the Cross-Industry Group, and Andrew
Love, the chairman of the Casino Operators' Association in the
UK. We have David Allen, chairman and chief executive of A&S
Leisure and Andrew Herd, chairman and chief executive of Westcliff
Casino Group. You are all very welcome. You will note there are
cameras on the walls and we are being filmed. Gideon Hoffman from
the Bill team is present at the meeting if required to clarify
something. We were very grateful for Greg Chalmers's presence
this morning when he was able to clarify two important points
of detail. The transcript of the meeting will be produced and
placed on the internet before the end of the week. A full declaration
of interests was made at the beginning of the first meeting and
that information is available. Can I also ask you to note that
we have five witnesses in this first session and six witnesses
in the second session, which is rather a large number to get through
and we will be here until seven or eight o'clock if everybody
tries to answer every question. Please only answer in addition
to an answer that has already been given if you have something
additional to add to what has already been said. Brevity from
us and from the witnesses would also be helpful. The government
has made some major changes to the policy proposed under the draft
Bill. Would you like to tell us how the new proposals affect the
casino industry?
Viscountess Cobham: I think it
is fair to say that the whole of the BCA would like to see a new,
dynamic modernising Gambling Bill take place as soon as possible.
Our submission suggests some ways in which we might help the government
achieve their stated objectives, with which we entirely agree,
which are providing protection for the vulnerable, controlling
proliferation and encouraging regional investment. We do not agree
that the way in which it is proposed at the moment is absolutely
the best way and we have suggested a few amendments to that to
help the government achieve their objectives. I hope you will
not think it self-serving of us to say that all of us have been
involved with the industry for very many years—indeed, since
the 1968 Act—so I hope the Committee might agree that the
industry has provided the background against which the government
might look at modernising and expanding the industry. It would
be fair to say in direct answer to your question that the proposals
as they stand at the moment would quite considerably affect the
industry and certainly put a quite different balance to that which
we were talking about when we last gave evidence to you. A number
of your witnesses this morning suggested there might be some 45,
or thereabouts, regional casinos which was perhaps rather larger,
if not much larger, than certainly many of us thought when we
were talking about a destination casino. There is considerable
agreement that the impact of the proposals as they stand at the
moment would have a considerably damaging effect on a significant
number of existing operations. That in principle has come from
a quite unlevel playing field. A consequence of that is a dramatic
increase in the number of gaming machines that might be in existence,
particularly potentially up to 50,000 category A machines in casinos
across the United Kingdom. Finally, the investment in casinos
will come almost exclusive in regional casinos because of the
difference in the product offers that will be available in the
different categories of clubs.
Mr Love: You have received the
COA submission. That lays out our position as we believe it. It
does endanger, in our view, the profitability of some of the smaller
or provincial casinos and overall we consider it to be too big
a change from where we were before.
Q173 Chairman: Do you think the government
has now resolved the issues that were left undecided in the draft
Bill at the time of our report, in particular, grandfather rights
and the mechanisms, which are what we are really interested in
in this inquiry, for defining and deciding the location of the
largest casinos?
Viscountess Cobham: Most of the
issues have been resolved but I would suggest to you that it is
a great sadness that, having had four years of what has been in
my view commendable consultation, there has been absolutely none
since we last spoke to you. That has resulted in the industry
being astonished by some of the proposals that appeared in the
Department's response to your report.
Q174 Chairman: Can I make two points
to clarify where we finished up this morning? First, Mr Chalmers
on behalf of DCMS confirmed that it is the government's intention
that there should be on the face of the Bill a regional casino
licence. This suggests that there ought as a consequence to be
some mechanism therefore of controlling the numbers. The number
45 arose from the fact that both the witnesses representing regional
planning bodies talked about potentially five regional casinos
in their region. If you count London and the south east as a separate
region, that comes to 45 if there are nine regions. We also talked
at some length about the question whether a regional casino should
have a separate planning use category and we will be questioning
the Minister about that. Would it be fair to say that your concern
might be less pronounced if some mechanism could be devised to
limit the number of regional casinos? Is it the risk of there
being as many as 40 or more which brings in the concern about
competitive disadvantage?
Viscountess Cobham: To some extent,
yes, but when addressing the issue of proliferation I know that
the government are anxious to control that and indeed so are all
of us. The view at the moment is that this is to be controlled
by the quality of product—ie, the difference between category
A and other types of machines—and by what can only be described
as an unlevel playing field at the moment with only category A
machines and regional casinos. 45 fits with about what we put
in our submission. If there are that many spread across the country,
almost inevitably the competition will be considerable between
both the category A machines and the rest. On one hand, obviously
we are entirely in favour of having a mixed offering in this country
and I am sure I am sitting at a table where others will not only
wish to encourage and enhance their existing estates but will
also invest in larger site casinos. What we are keen to ensure
is exactly what the government put in their response to you, which
is that there is a twin tracking of allowing the existing clubs,
about which there has not been huge criticism—or indeed,
I might suggest, any—alongside the development of the largest
casinos, the regional casinos. It is that level playing field
that we are looking for. We are not saying, "Not in our back
yard" at all and I would not wish anyone to think that we
were.
Q175 Lord Faulkner of Worcester: In
view of the fact that you dislike the government response to our
report so much, would it be right to say that you would rather
have no Bill at all as opposed to the Bill which we are likely
to get if the government proceeds with a Bill based on their response?
Viscountess Cobham: It is a difficult
answer to give in that, as I opened by saying, I think we would
all like to see a dynamic, new Bill which encompasses the whole
sector in a productive manner that is a good Bill, good legislation.
I am sure I speak for everybody. We would like to see the right
Bill moving forward as speedily as possible.
Q176 Lord Faulkner of Worcester: If
you do not get the right Bill, would you rather have no Bill at
all?
Mr Kelly: We have all along, for
five years or more now, been very committed to the new legislation.
We would all be deeply disappointed if the legislation that emanated
from this long consultation process was as flawed as we consider
it might be, given the proposals that are currently in front of
us in the DCMS response. Our absolute focus at the moment is on
trying to ensure that we do have an orderly expansion of the market
place and that the industry plays its part in trying to outline
as much as it can what the implications of the proposed legislation
might be. However, to be even more direct with you, legislation
and new legislation is absolutely critical to this industry for
a number of reasons and I would be enormously dismayed if we resulted
in no legislation as opposed to legislation which may not at the
end of the day in any case suit anybody's purpose.
Q177 Lord Brooke of Sutton Mandeville:
For safety's sake, I should declare again I am a small shareholder
in London Casinos International and the Rank Group. Given the
number of changes the government made in the licensing legislation
over a four year period before they introduced it, do you regret
now not having made some of the suggestions which you are now
making at an earlier stage in the process?
Viscountess Cobham: To be frank,
I thought that as we worked through the consultation process we
were moving along in the right direction. I felt my members were
content with the direction. Nobody gets exactly what they want
and we are all realists. We have recognised the government's objectives
and we hope that we have been working along with them to the benefit
of the industry as well as achieving the objectives laid out by
the Department. No, I do not have regrets at not having put forward
some of the things that we have put forward now because the playing
field has altered quite dramatically as we have moved along. We
are the creators of the legislation so we have had to work with
it.
Q178 Lord Brooke of Sutton Mandeville:
Given some of the problems which were uncovered by the pre-legislative
scrutiny committee in its earlier report, had the likelihood of
those problems being unearthed not occurred to your sector of
the industry in advance?
Viscountess Cobham: We thought
you had done a rather good job, if I may say so. We were reasonably
content in broad terms with what you put forward.
Mr Love: Can I comment on the
question Lord Faulkner put? I find it particularly disappointing
that an industry that has served the country so well since the
1968 Act, by and large, has been in a sense turned upside down
and any commercial advantage will change from the existing operators,
albeit that they have the opportunity of going into new regional
casinos. They will not be able to compete on the same terms, whichever
way you look at it, because they do not have the same opportunity.
I think that is a very unfortunate part of the new June Bill.
Q179 Lord Faulkner of Worcester: You
would prefer to have the status quo and for this Bill to be abandoned?
Mr Love: No, I would not. We have
stated that there is a need for constructive change, not necessarily
absolute change. It is how it is dealt with and how it is put
through that becomes important. We all have said that it is necessary
to amend the 1968 Act. I do not think anybody would disagree with
that. It is the speed and the manner in which it is dealt with.
| 
