14. Memorandum from Kerzner
International, UK Gaming Division (GMB 20)
We are pleased to submit the following with
regard to the Government's response to the Joint Committee on
the draft Gambling Bill's recommendations 79, 80, 81, 83, 84 and
85; and the further statement of Government policy on casinos
published with the governments response.
With regard to the Government's response to
the Joint Committee on the draft Gambling Bill's recommendations
79, 80, 81, 83, 84 and 85:
1. We support the introduction of the "regional"
casino definition.
2. Minimum area requirements:
(a) We support the minimum area requirements
for regional casinos detailed in the governments response of 1,000
square metres table gaming area, 2,500 square metres additional
gaming area, and 1,500 square metres non gambling area, creating
a minimum total customer area of 5,000 square metres.
(b) We recommend that an additional minimum
size criteria be applied for the total demise of "regional"
casinos of 10,000 square metres.
This will ensure that the appropriate scale regeneration
projects are delivered and that public areas (that may not be
defined under "table gaming", "additional gaming"
or "non gaming" areas), back of house, and ancillary
facilities are not reduced disproportionately to meet the size
criteria, potentially leading to a higher number of smaller premises
than intended and consequently a larger proliferation of machines
in the market.
Provided the minimum customer areas are complied
with the operators should have discretion as to how this space
is allocated.
(c) We support the proposed minimum area
requirements for "small" and "large" casinos.
3. Categories of gaming machines permitted:
(a) We strongly support the restriction of
category A machines to "regional" casinos.
(b) We concur with the government's reasoning
that "regional" casinos are the most suitable location
for these machines, particularly with regard to the non-ambient
or "destination" gaming environment.
(c) We support the notion that this will
avoid proliferation of these machines in ambient environments.
(d) The principal of different machine categories
and payout limits for different premises is well established in
the UK market place. We believe that the £2,000 payout limit
currently established in existing casinos would be an appropriate
limit for category B machines in casinos.
4. Machine/Table Ratios and machine caps:
(a) We support the machine ratios and caps
proposed for "small" and "large" casinos.
(b) We note that "large" casinos
will now be able to reach the cap of 150 machines with 30 tables.
(c) We support the notion that no casino
should be entitled to unlimited machines. The cap on machines
in "regional" casinos at 1,250 machines will however
restrict the level of planning gain that "regional"
casinos can deliver and limit potential development scale. Whilst
"regional" casinos will be built at this level we believe
that more practical limits of 1,500 to 1,700 would make a significant
difference to investment potential and not lead to significantly
higher numbers of machines in the market.
(d) We support the ratio of up to 25:1 machines
per table for "regional"" casinos, any lower ratio
will have a negative impact on investment levels.
(e) The definition of machines permitted
for "regional" casinos refers to "Up to category
A". We interpret that this will be at the discretion of the
operator as to what machine categories are to be utilised. Any
further effective restriction of category A machine numbers will
have a dramatic impact on the affordability of major investments
proposed. The potential concern that all category A machines will
as a matter of course offer high jackpots is not borne out from
the practical experience in other markets around the world, where
a wide variety of payouts and very few mega-jackpots is more the
norm.
With regard to the joint ODPM-DCMS statement
on Casinos published with the government's response:
1. Resort Casino definition:
(a) Our comments regarding the definition
of a resort/regional casino are dealt with above.
(b) We believe there should be a minimum
area requirement for the total demise of a "regional"
casino of 10,000 square metres.
2. Definition of "available for use":
(a) We support the practical approach taken
and the recommendations with regard to tables available for use.
3. Automatic and remote casino terminals:
(a) We support the definitions proposed.
(b) We note that this will enable large casinos
to site significant numbers of dealer controlled automated roulette
machines on the casino floor and provide an incentive for the
industry to invent more games of this nature.
4. Casinos licensed under the Gaming Act
1968:
(a) We agree that existing casinos should
be able to relocate premises (subject to planning controls), without
being required to change to the minimum size threshold, within
the area of the licensing authority in which they hold a premises
licence and should be able to be resold freely so long as the
new owner also holds an appropriate operating licence.
(b) The Government responded to recommendations
on the issue of grandfather rights by referring to the policy
memorandum of the 5 February 2004. In this memorandum it was made
clear that where the holder of a gaming licence (issued under
Part 11 of the 1968 Gaming Act) applies to a licensing authority
for a new style premises licence under the new regime, then the
licensing authority will be required to issue the premises licence.
Would the licensing authority be obliged to issue
a "regional" casino premises licence at the point of
conversion to an existing licensed casino that meets the minimum
area requirements for a regional casino?
All existing casinos only qualify in terms of
their licence for 10 gaming machines. We do not believe it is
the intention of the draft Bill that such existing licensed premises
should automatically or unconditionally qualify as a "regional"
casino with 1,250 category A machines under grandfather rights.
We therefore recommend that all applications for "regional"
casino premises licences be new licence applications under the
new dispensation so that all licensing and planning issues, (particularly
in light of the emphasis placed in the draft Bill on the identification
of suitable locations for such casinos) can be considered by the
relevant licensing and planning authorities at the relevant time.
5. Regional Planning Bodies and Regional
Spatial Strategies:
(a) We are supportive of the roles proposed
for Regional Planning Bodies and the process whereby Regional
Spatial Strategies will identify the most suitable locations for
"regional" casinos.
(b) We would support a process that ensures
that Regional Spatial Strategies with specific regard to "regional"
casinos are updated expeditiously before the point of conversion.
(c) We would strongly encourage the government
to reconsider the issue of a different use class for "regional"
casinos. Given the unique emphasis placed on "regional"
casinos from a planning perspective with regard to their suitable
location, the planning gain delivery, and the regeneration, tourism
and employment benefits, we believe the classification of "regional"
casinos (and possibly all casinos) as "sui generis"
would be more appropriate and would go some way to thwarting subversive
strategies to convert existing large D2 premises into "regional"
casinos.
We concur with the previous evidence given to
the committee by Mr Jennens in this regard, who pointed out very
clearly some of the potential consequences of leaving casinos
in the D2 use class and suggested "Casinos must be lifted
from any other category and either all casinos should be regarded
as `sui generis' or they should be provided with a separate
category solely for casinos . . .".
We also concur with the evidence given to the
scrutiny committee by Mr Haslam stressing the importance of recognising
the relationship between regional economic strategies and regional
spatial strategy, and his suggestion "I think the casino
use has to be `sui generis'".
(d) The conclusion of the joint statement
includes the point "New large casinos will be located in
the most appropriate places in terms of their tourism and regenerative
potential . . .". We assume this is intended to apply to
both "large" and "regional" casinos.
About Kerzner International
Kerzner International Limited (NYSE: KZL) is
a leading international developer and operator of destination
resorts, casinos and luxury hotels.
The Company's flagship brand is Atlantis, which
includes Atlantis, Paradise Island, a 2,317-room, ocean-themed
destination resort located on Paradise Island, The Bahamas. Atlantis,
Paradise Island is a unique destination resort featuring three
interconnected hotel towers built around a 7-acre lagoon and a
34-acre marine environment that includes the world's largest open-air
marine habitat and is the home to the largest casino in the Caribbean.
The Company also developed and receives certain
income derived from Mohegan Sun in Uncasville, Connecticut, which
has become one of the premier casino destinations in the United
States.
In its luxury resort hotel business, the Company
manages nine resort hotels primarily under the One&Only brand.
The resorts, featuring some of the top-rated properties in the
world, are located in The Bahamas, Mexico, Mauritius, the Maldives
and Dubai. Further One&Only properties are either underway
or in the planning stages in the Maldives, Cuba and South Africa.
In 2003 the company set up the UK Gaming Division
and acquired a property licenced to operate a casino in Northampton.
In March 2004 Kerzner Northampton Limited was granted a certificate
of consent by the Gaming Board for Great Britain to operate the
casino in Northampton. In May 2005 the licence was transferred
to Kerzner Northampton.
The UK Gaming Division has been investigating
a limited number of major scale regeneration initiatives where
the unique Kerzner product offering would be appropriate, and
has made no formal announcements in this regard at this time.
July 2004
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