Kerzner International, UK Gaming Division,
submission to the Joint Committee on the Draft Gambling Bill (Regional
Casinos), June 2004.
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 m2 table gaming area, 2500 m2 additional
gaming area, and 1 500 m2 non gambling area, creating
a minimum total customer area of 5 000 m2.
b. We recommend that an additional minimum
size criteria be applied for the total demise of "regional"
casinos of 10 000 m2.
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 m2.
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 5th 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.
For more information concerning the Company and its operating
subsidiaries visit www.kerzner.com
| 
