Examination of Witnesses (Questions 362
- 379)
THURSDAY 8 JULY 2004
PROFESSOR PETER
COLLINS AND
PROFESSOR SIR
PETER HALL
Q362 Chairman: Order. It gives me
very great pleasure to welcome our two final witnesses in this
inquiry, someone new to the Committee, Sir Peter Hall, Professor
of Planning at the Bartlett School of Planning, University College,
London, and one of our special advisers from our previous inquiry,
Professor Sir Peter Collins from the Centre for the Study of Gambling,
University of Salford, and, of course, Chief Executive Officer
currently of Gamcare. I think it would not be unfair to say, Peter,
that one of the reasons why we have asked you and Professor Collins
to come is so that some of the helpful comments that you have
made to the Committee previously in confidence can actually be
on the public record. Can I begin by asking you, Mr Collins, this
question? The Government's aim is to protect the public by limiting
the accessibility of category A gaming machines. Do you think
that the policy set out in the Government's response will succeed
in meeting this aim?
Professor Collins: I think it
will go a long way towards meeting this aim. I think it will do
so particularly if regional authorities also ensure that category
A machines are located in regional casinos at a substantial distance
from where people live and work. The reason for that is because
what I call variable prize machines, as opposed to fixed prize
machines, rather than unlimited prize machines, which I think
is quite a misleading term, but variable prize machines need to
compete against more conveniently located category B or fixed
prize machines, and that they will do under these proposals if
they are interpreted in this way by regional authorities.
Q363 Chairman: Is limiting the availability
of category A machines an appropriate way of limiting problem
gambling? What is the greater evil: the prize, the stake, or the—
Professor Collins: As far as I
can tell from reviewing the evidence which is in my submission,
convenience is the single greatest spur to increase problem gambling.
The reason for that is that problem gambling is a disorder of
impulse control, consequently people are likely to engage in problem
gambling behaviour more if temptation is regularly put in their
way when they are not expecting it. This means that a casino machine
of any sort located, for example, in a supermarket is highly dangerous.
At the other end of the scale, a machine, even a high prized machine,
located in a casino out of town or on the edge of town a long
way from where people live and work, means that people have to
make a number of decisions before they go there, not just about
their gambling; they have to make decisions about what do with
children, how they are going to travel, what they are going to
do about food; and while they are making those decisions, they
will also make the crucial decision about how much money they
can afford to risk losing.
Q364 Lord Mancroft: What was your
reaction to Mr Hill's suggestion that the regional casinos should
be situation on high streets?
Professor Collins: That does relate
to a later question which I am down to ask, but my general view
on that is two-fold. First of all, from a problem gambling point
of view, there is no doubt that it is better not to locate casinos
in town centres. There is no question of that. There may be other
reasons, like limiting the number of car journeys that are involved
and therefore reducing physical pollution for doing that, but
the other point I would make, which is not about problem gambling
but it is about social impact: if you put a large entertainment
complex, including a casino, in the centre of a town, you will
suck huge amounts of money out of the leisure economy in that
town. This goes against the principle of trying to ensure that
casinos, in as far as they displace economic activity, do so from
a wide area of relative affluence and concentrate the new spend
in areas of relative disadvantage. That is the best way of dealing
with the economic redistribution policy. I think that is something
which not only is undesirable in itself, but will clearly lead
to all sorts of objections from all sorts of businesses to downtown
casinos.
Q365 Chairman: Do you have any evidence,
or are you aware of any evidence that category A high value gaming
machines are worse or pose a greater risk of problem gambling
than category B machines?
Professor Collins: I do not think
there is good evidence on that. I think there is good evidence
that very low prize machines, £25 machines, category C machines,
are a good deal less dangerous than variable prize or big prize
machines. I do not think frankly we know enough yet about whether
in themselves category B machines would be lease addictive or
safer than category A machines. Certainly though we do know that,
if you have got a choice between locating category A machines
inconveniently and locating category B machines conveniently,
it is better from a problem gambling point of view to locate the
category A machines inconveniently.
Q366 Chairman: I want to bring Mr
Chalmers in a moment to clarify something that we think is quite
important about the numbers and the likely mix of machines. Do
you have a feel for the kind of mix of different categories that
these big regional casinos are likely to develop within this 1,250
machine cap? We suspect that some developers think that all of
these should be category A machines, although others say they
do not necessarily think they all would be category A machines.
Do you have a feel for this?
Professor Collins: Yes, that is
why I call them variable prize machines, because that is the key
thing about making the total mix attractive to the customer; that
the customer goes into the casino and can play either low stake
machines for medium sized prizes or low stake machines for very
high prizes, but you do not get the prize very often, or more
or less any combination. What is certainly true, and I think this
has been misunderstood, is that the very high prize machines,
the mega bucks machines which will pay out a million dollars,
are not much played. They are played by people in the same way
they play the lottery. They might put 10 dollars in when they
go into a casino and they might put 10 dollars in when they go
out of the casino, but their main reason for going to the casino
is because they enjoy the activity of playing. What they want
is length of playing time, not any particular size of prize, provided
the size of prize attractive, is large enough to be attractive.
Q367 Chairman: Mr Chalmers, are you
able to help the Committee by giving some indication as to what
the regulations are likely to say about machine entitlement, and
particularly category A machine entitlements within regional casinos?
Mr Chalmers: You have obviously
heard commercial views from different people about the mix of
machines that they will have in regional casinos. The proposal
set out in our response to recommendations 77 to 85 involves category
B machines being of good value and the regulations as having no
limits upon stake and no limits upon prize, but, as Professor
Collins and others have said, and as I think Lord McIntosh observed
when he was in front of the Committee, the practice of casinos
across worlds is to have a range of stakes and prizes for the
very reason that Professor Collins is describing. Although I think
I recall correctly the other day that one of the international
witnesses said that all of the machines in their casinos would
be category A in the terms presently set out, but I am not sure.
Q368 Chairman: But are they expressing
that view—this is very important—because they think
that the definition of a category B machine would limit the stake
to £1 and the potential pay out to £500, given the fact
that the Minister himself told the Committee the other day that
there would be an opportunity to have variable stakes and prizes
within category B machines relative to the actual location; so
you might therefore have a bigger stake and prize in a category
B machine in a casino than you might have in a Bingo club. Is
there not a need for the Government now to clarify this and try
and reach some memorandum of understanding about these limits,
because we are concerned that the overseas operators and, in fact,
even our own operators who wish to invest in new casinos think
that they have a 1,250 machine entitlement to category A machines.
I have a suspicion the Minister does not see it in that way. In
the meantime the existing industry feels that there is not a level
playing field because they cannot have these machines, and if
they are limited to £1 and £500 stake and prize machines
only, the imbalance between the product they are offering and
the one that the new regional casinos will be offering will be
very severe, so severe that even the Transport and General Workers
Union have expressed real concern to this Committee in their memorandum
about the effects on jobs in the existing industry.
Mr Chalmers: I can certainly understand
the point that you are making that the common understanding of
a category B machine might have led to some concern to think that
that simply was not appropriate or what they thought should be
in a regional casino, but I think the Minister mentioned, there
is flexibility in the Bill for category B to mean different things
in different places, as it were, flexibility for all categories
to mean different things in different places and we will certainly
take on board any recommendations perhaps you make.
Professor Collins: Can I make
a comment on that. It seems to me that if you were to make category
B machines effectively the same in terms of attractiveness as
category A machines, two things would happen. One is that most
gambling would then take place in relatively convenient locations,
namely relatively conveniently located Bingo clubs, betting shops
or smaller regional casinos.
Q369 Chairman: But only if the higher
stake and prize was available to them. It may not be.
Professor Collins: If it were
the same in regional casinos and large casinos then you would
see most gambling taking place wherever the most convenient large
casinos were located. I think the other point is, if you do not
differentiate between the two, you will not get the regeneration
benefits, if that is important. It may not be, but if it is you
will not get those.
Q370 Chairman: Thank you. Could I
ask Sir Peter Hall whether he thinks the proposed planning policy
for regional casinos supports the aim of limiting accessibility
of category A gaming machines?
Professor Sir Peter Hall: No,
not in its present form, and I will use a word that is very difficult
to pronounce that I know was used by the Blackpool representatives
on Tuesday, and that is specificity. I do not think that government
policy, either in relation to national policy through planning
policy statements or regionally through what they are proposing
for regional planning guidance, is sufficiently specific on this
point, because it essentially does not say, it does not give any
indication where regional casinos are to be located. The reason
for that is the disappearance of the term "resort casino"
or "destination casino". That latter word particularly
expresses precisely the distinction that I think Professor Collins
has been trying to make about convenience, or the lack of it,
in reaching the casino in the first place.
Q371 Lord Wade of Chorlton: Following
on from that, Sir Peter, the Casino Operators Association said
to us that the planning proposals for regional casinos are still
clouded by lack of detail. I wondered what you felt is within
this planning process with respect to regional casinos and whether
it is sufficiently clear. You indicated one view. Would you like
to enlarge on it a little?
Professor Sir Peter Hall: I should
welcome that. Thank you. I think it is insufficiently clear, because,
as the minister has just indicated, the Government's view is clearly
that it all has to be left up to the regional planning bodies
to define their own policies in each region, modified, rather
startlingly, by the proposal for calling of the first two or three
proposals, which seems to indicate that there is somewhere in
a drawer a set of criteria for judging these applications which
has not been vouched safe to anyone, especially this Committee.
Q372 Chairman: We were forming that
view earlier.
Professor Sir Peter Hall: But
the key to this, I think, has to be is a regional casino a destination
casino. Let us put it very bluntly by way of example, and I do
have to again declare my interest as Shadow Chair long-term of
an urban regeneration company that does not exist, the Blackpool
Urban Regeneration Company. If you look at the Blackpool proposals,
which are well-known to the Committee, if you look at, for instance,
the proposal for Sports City in East Manchester, are those both
regional casinos? Clearly, by any criteria, the Blackpool proposal
will have been. You would have to travel from most of populous
Lancashire and Yorkshire a considerable distance, and therefore
you would have to make those critical decisions that Professor
Collins alluded to before you set out to travel. It would not
be something you could casually do. In relation to Manchester
it is a little more complicated, because that development is not
interestingly, a city centre development by definition, by any
definition that ODPM have used. It is a slightly off-centre location
that might be allowed to be, I do not know, a sort of near to
city centre location, but obviously the decision as to reaching
that location on a Saturday night would be rather more casual
than it would be about getting on a motorway and travelling the
M61 and the M55 to Blackpool; and that is the critical distinction,
I think, that needs to be embodied somewhere.
Q373 Lord Wade of Chorlton: May I
just follow up with that, because when we took evidence yesterday
from the American casino operators, they clearly have their vision
of what their large casinos or their regional casinos are going
to be, they are going to be very large leisure complexes costing
in the region of $150 to $200 million were the sort of phrases
they used, and are going to attract not necessarily high players
but, if you like, people who are looking for leisure week-ends
and going with their families and a family-based operation. It
seems to me, if that is their concept, it is not something that
is actually defined in what the Government's proposals are. Would
you like to comment on how you could add to those definitions,
if you like, that made it very clear that these were very large
entertainment complexes of which casinos were a part rather than
the centre?
Professor Sir Peter Hall: Thank
you. I would. In fact, as an academic, as a professor, I am bound
to refer to the literature, and I have in my evidence referred
to this rather recent book, Suburban Xanadu, which is an academic
study of the American casino industry and its evolution; and that
makes it clear, and I have the exerpt which I will put into the
secretariat at the end of this examination—
Q374 Chairman: Thank you; that would
be helpful.
Professor Sir Peter Hall: It is
ready. The recent evolution in Las Vegas, in particular, is exactly
as the American operators say. They are now looking to synergy—it
is a rather over-worked word, I know—between several casino
complexes with a view to people who do go there for a weekend
or a long week end, and they are looking not exclusively to gamble
at all but for a leisure week-end. They are looking surely to
do some gambling, and it would need to be an extended experience,
hence the critically important point of a range of prizes which
gives the possibility of extending the gambling over a period;
but they are also looking to other experiences, especially live
entertainment, shows, eating out, bars, and so on, which those
complexes do so well. But the new trend is that, instead of each
complex being a self-contained complex competing with the next
one, which to some extent it still does, they are seeing synergies
from being clustered together along the Strip; and that is, I
think, the crucial criterion more than one casino in a cluster—that
is another fashionable word in the academic literature about city
development and regeneration—a cluster of casinos, which
would be more than the sum of the parts, and I think that concept
needs to be embodied somewhere but has not yet been embodied in
guidance.
Chairman: We have been asking questions
about aggregation and getting precious few answers. I am sure
Lord Faulkner would want me to say that your point about a leisure
mix, and I think you did refer to theatres, was something that
effectively influenced our previous recommendation about there
being a requirement for these large casinos to make such investment.
That is very helpful.
Q375 Lord Faulkner of Worcester:
I wonder if Sir Peter could stick with the problem, if one can
call it this, of the competing claims of Blackpool and Manchester,
because very early on in our earlier inquiry we received some
very powerful evidence from people who were interested in Blackpool
who made it very clear that the viability of a Blackpool development
was conditional on there not being a regional competitor which
would in their eyes take away the investment. You have sat through
the session this morning and listened to the minister. There is
clearly no intention on the part of the Government to have any
form of direction or even statement of preference, as far as I
can see, between, say, a run down seaside resort or an urban centre
like Manchester. So how would you envisage that it would be possible
to resolve this problem of competing claims within a region and,
indeed, between one region and its neighbour?
Professor Sir Peter Hall: Thank
you. In relation to one region and its neighbour, if I may take
your point in reverse, I think there is a certain difficulty,
because, as we all know, the geography of the British regions
is very, very different. As I have said in my evidence, seaside
resorts, especially those suffering economic difficulties, are
highly concentrated in certain regions; I adduce the whole series
of resorts along the East Sussex and around the Kent coast which
have experienced very serious difficulties in the last 30 years
from at least Hastings all the way round to Broadstairs and perhaps
Herne Bay; also, of course, very evidently in North West England,
not merely Blackpool but Morcambe and possibly also Southport,
whereas, by definition, the West and East Midlands have no seaside
resorts at all. If you were considering, for instance, a casino
in Birmingham, what is it competing with? Maybe it is competing
with a casino in Blackpool because the M6 takes you almost straight
there, and the Government are now proposing a toll road to make
it faster, but probably there is not the same degree of competition
as you get between Manchester and Blackpool within the north-west.
That said, with reference to the problem within a region like
the north-west, which might also be a problem down here in the
south except for the artificiality that London is a separate region
and so gambling on the Greenwich peninsula, for instance, would
be considered separately, in fact, by the Mayor, from the situation
in the south-east region outside London. A bit unfortunate that.
But to concentrate on the north-west, which is a simpler matter,
because you will have one regional planning body, what do you
do? It seems to me that one does not want to deny the possibility
that East Manchester should have some gambling as part of that
complex. After all, it is Sportcity; the whole concept has been
developed around sport; and I presume one can say that gambling
has traditionally been part of servicing sports at least in this
country. On the other hand, there is a very great danger indeed
that if the scale of development there grew to such a point that
it was offering a similar mixture of gambling and perhaps some
entertainment, not on the scale of Blackpool perhaps but sufficient
to make a good evening out, that would make a fatal difference
to the Blackpool proposal. It is difficult to say where this line
is drawn, but it is somewhere between large and regional, and
large has to mean not too big and certainly an entirely different
scale of experience from regional.
Q376 Chairman: The "large"
definition we had before, or the one that the Committee recommended,
of perhaps eight machines to one table, might have been a better
mechanism for allowing that to proceed.
Professor Sir Peter Hall: Yes,
I think that would be so, but I would probably prefer defer to
Professor Collins on that point.
Professor Collins: In general,
on any region, there is a substantial economic dimension to this.
Assuming, for example—this is where the market comes in—but
assuming that after the Bill was passed total expenditure on gambling
grew by 20%, and assuming that the new casinos captured, new regional
casinos (1,250 slot machine casinos) captured 20% of that market,
on the basis of what is spent in the north-west at the moment
you could probably sustain five 1,250 slot machine casinos costing
about £100 million each. That is the sort of rough economics
of it. Of that £100 million the financial cost of building
the casino would only be about 60 to 70, which leaves you £30
million over per project for regeneration or planning games or
these other things which effectively make the whole project, one
hopes, attractive to the people in the area where it located.
Obviously you have got to make a policy choice. You could say,
"We will have four or a five casinos in Blackpool, and that
is the only place in the north-west we will have them", in
which case those casinos—
Q377 Chairman: You mean very large
ones; you do not mean small ones?
Professor Collins: You would have
6,000 machines in Blackpool, say, and none anywhere else; certainly
no category A machines anywhere else. That, of course, is politically
very difficult to do, particularly since Manchester has announced
only this morning that they have awarded, after going through
a tendering process, a project costing £260 million which
includes low-cost housing, which includes artificial surfing,
which includes rock-climbing, which includes all sorts of things
which cost about £200 million together. It is really the
economics which is going to make the conflicts of interest difficult
to resolve. That is why I am hopeful that the regions will bring
the different local authorities in their areas together in some
form or another and say, "There is a limit to what we can
have, what are the best places to locate the kind of regeneration
which casinos are particularly good at doing and what do we do
for those places which do not get the benefit?" In other
words, there has to be a regional policy at least for redistributing
the benefits so that it is not perceived to be a zero sum gain
for the losers who therefore have an interest in just fighting
the whole thing.
Q378 Chairman: But it is your view,
Professor Collins, I think, from what your saying, that this proposal
in East Manchester to which Sir Howard Bernstein, when he was
before the Committee on Tuesday, made abundantly clear the City
of Manchester is absolutely committed, the scale of what is going
to be built there is not affordable on the 150 machine limit which
the Government is now proposing for large casinos.
Professor Collins: No, not on
that. It will be interesting to see whether you can do it on 1,250
if it is a £260 million project, but that rather depends
on how many of the add-ons wash their hands!
Q379 Chairman: The Kerzner representative
told us on Tuesday afternoon that the 1,250 limit they could live
with in terms of what they were proposing to do, so one assumes
that he must have had the Manchester project in mind given that
they were awarded it the following day?
Professor Collins: I would say
they can do it and they could do it if there were another similar
sized casino of 1,250 at Salford, another one in Liverpool and
another one in Blackpool, and maybe another one somewhere else
in the north-west, but what you cannot do is have lots of places
offering category A machine gambling also competing for the same
East Manchester market. It is about a half-hour travel time.
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