APPENDIX: DRAFT GAMBLING (GEOGRAPHICAL
DISTRIBUTION OF CASINO PREMISES LICENCES) ORDER 2007: CORRESPONDENCE
Letter from the Rt Hon. Tessa Jowell MP, Secretary
of State for Culture, Media and Sport to the Chairman
1. Thank you for providing a copy of the 13th Report.
The Committee is to be congratulated on the thorough job it has
done in the very short time available to it.
2. However, in view of the critical importance of
this Order to many local authorities and businesses throughout
the country, I should write to clarify some apparent misunderstandings
at the heart of the Committee's conclusion that the Order may
imperfectly achieve its policy objectives.
Minimisation of harm from gambling
3. One of the most fundamental arguments made by
the Committee, and one which runs throughout the report, is that
the Casino Advisory Panel should have placed greater emphasis
on the minimisation of harm from gambling. I should explain that
this was not the primary consideration we set for the Panel.
4. The criteria against which the Panel would assess
submissions were set out in the Government's national policy statement
on casinos, published on 16 December 2004, which makes reference
to the protection of children and vulnerable people. In paragraph
10 of its report, the Panel noted that the Department had asked
it to have due regard to the national policy statement.
5. The Panel's primary consideration was to ensure
that the locations provide the best possible test of social impact.
Subject to this, the criteria were also:
- to include areas in need of regeneration (as
measured by employment and other social deprivation data)
- to ensure that those areas selected are willing
to licence a new casino.
6. I did not ask the Panel to make final recommendations
based exclusively on the minimisation of harm from gambling. If
the Panel had done so, it would not have been following its remit.
7. It is the role of the Gambling Commission to monitor
and minimise any harm that might arise from new casino gambling.
It was the job of the Casino Advisory Panel to select locations
that are best able to be monitored rigorously. I am satisfied
that is exactly what they have done.
Consideration of licensing objectives
8. That is not to say that the Panel did not take
the licensing objectives, and the minimisation of harm into account
when framing its recommendations. In this context, I note the
Committee's suggestion that the Panel gave greater prominence
to economic factors and less to the minimisation of harm from
gambling, and concludes that the objectives of the Order have,
as a result, been undermined. The Government does not accept this
view.
9. The Panel set out its approach very clearly at
paragraphs 83 & 84 of its report:
"it is clear to us…that among the many
ways 'regeneration' may be defined, it must be holistic, to include
not only physical and environmental regeneration, best expressed
by the older term "redevelopment", but also a wide spectrum
of social and economic considerations.
Moreover, we note that the 2005 Act sets out 'licensing
objectives' related to preventing crime and disorder and the protection
of children and young persons from harm. Not only are these considerations
implicit therefore in providing the best test of social impact,
but are also essential considerations regarding regeneration as
we see it."
10. It is worth explaining the interplay between
the work of the Panel and the licensing objectives set out in
the Gambling Act 2005:
- preventing gambling from being a source of crime
or disorder, being associated with crime or disorder or being
used to support crime
- ensuring that gambling is conducted in a fair
and open way
- protecting children and other vulnerable persons
from being harmed or exploited by gambling
11. The new regime brought in under the Gambling
Act is the primary tool at our disposal for achieving these objectives.
The Gambling Commission is a tough new regulator at the heart
of arguably the most rigorous regulatory system, short of prohibition,
anywhere in the world. Within that overall framework, our national
policy on casinos is designed to further these objectives, whilst
at the same time acknowledging the legitimate desire on the part
of many local authorities to explore the potential economic and
regenerative benefits of new casinos.
12. That is why the seventeen new casinos form part
of a pilot and why the terms of reference we set for the panel
required it to identify a series of locations that would facilitate
the best possible test of the social impact of that pilot. Had
we asked the panel to concentrate solely on the minimising harm,
we would not have a proper basis on which to make future decisions,
jeopardising the Government's ability to meet the objective in
future.
13. We have commissioned a group of academics led
by Lancaster university to advise on the methodology for the assessment
of the impact of the new casinos and we intend to begin work on
the baseline study before the end of the year.
Consideration of areas versus sites
14. I should perhaps turn to another central theme
of the Committee's report; that an individual local authority
given the power to award a new casino licences is free to issue
the licence to any site within the authority area. This was set
out in the national policy statement in 2004, and has not been
challenged since. The Panel built this into its considerations.
At paragraph 23 of its published report it states:
"We regarded it as fundamental that our decisions
should not be based on the perceived site-specific advantages
of a particular applicant for a licence. In the event that we
were to recommend to the Secretary of State an area involving
a specific site proposal, it followed under the legislation that
the local authority would nevertheless need to comply with requirements
for inviting competing applications as provided for by Schedule
9 of the 2005 Act".
It goes on to say at paragraph 88 that:
"Our remit, however, is too look at areas
rather than sites and we have very much focussed on that".
Destination casinos
15. Paragraph 17 of the Committee's report records
a short exchange between you and Professor Crow on the subject
of "destination casinos". I believe there are two points
that are worth making to assist the forthcoming debates:
- The City of Manchester is, in its own right,
a very important destination; apart from 2002 when it appeared
fourth in the rankings, in each of the years 2001-2005 (the latest
date for which we have figures), Manchester was the third most
important overseas tourist destination in the UK, behind only
London and Edinburgh.
- It is sometimes overlooked that Professor Crow
and the panel have made recommendations for 17 casinos in total,
not just the sole regional casino. The overall package includes
some authorities that include coastal resorts within their areas.
Supportive evidence
16. Finally, I note that amongst the impressive collection
of evidence the Committee has collated in the short period of
time it has had to consider the matter are several submissions
which, broadly speaking, commend the Panel, the process it has
followed and the recommendations it has made. It is not clear
from the Committee's report that those views have been taken sufficiently
into account.
17. I am firmly of the view that the Panel has done
exactly what I asked of it; and in so doing has enabled me to
bring forward an Order that secures the achievement of the Government's
policy objectives.
21 March 2007
Letter from Professor Stephen Crow CB, Chairman of
the Casino Advisory Panel, to the Chairman
1. On behalf of the Casino Advisory Panel I would
like to thank your Committee for providing me with the opportunity
to give oral evidence on their behalf on 13 March 2007. The Panel
has now had the opportunity to consider your 13th Report
and feel it is important to place on record what they believe
to be a small number of misconceptions.
2. But before I do that, may I say that I am pleased
that your Committee has recognised and acknowledged that we carried
out our work in an honest and transparent manner.
3. You are aware, I know, that the Panel examined
a significant volume of material during the course of its work
over a 16 month period commencing October 2005. The list of documents
formally submitted to the Panel is set out as Annex H to our Final
Report. This listing alone extends to 29 pages. Oral evidence
was also heard at seven separate Examination in Public sessions
in respect of shortlisted regional proposals. The taped record
of the Examination in Public sessions has been made available
to interested parties on request. At no time were transcripts
promised.
4. On the basis of the very considerable amount of
evidence received and our careful analysis over the last 16 months
the Panel continues to feel confident of its conclusions and recommendations.
We are heartened by the fact that the substantial majority of
those who provided written evidence to the Select Committee, including
a number of unsuccessful bidders for the Regional casino, supported
the process, the report and the recommendations of the Panel.
The Panel is not at all surprised that a small number of the Local
Authorities that were unsuccessful should express their disappointment
in different ways.
Minimisation of Harm from Gambling
5. The Panel is very concerned that your Committee
(at paragraph 36) concludes that we did not give high priority
to the minimisation of harmful effects to the community. This
is just not so. At paragraph 12 of our Final Report we made it
clear that social impact considerations, both positive and negative,
were implicit in both our remitted criterion about the best possible
test and also in our criteria concerning regeneration. Not only
did we accord much weight to this consideration, one Panel Member
was appointed particularly for his expertise in matters of social
impact and was well able to analyse issues relating to the negative
impacts of gambling.
6. So our call for proposals specifically probed
local authorities on their experience and proposals for minimising
harmful social impacts. This consideration was then followed up
in our subsequent round of further questions.
7. In relation to the regional casino proposals,
at every Examination in Public session relating to the regional
casino, we invited oral evidence from a range of organisations
concerned with social problems of gambling and in particular the
local concerns for ambient gambling in that particular area. These
are listed in Annex J of our Final Report. They include local
residents associations, the police, the Salvation Army, Quakers,
Christian Institute, NHS Primary Care Trusts, Faith Groups, and
regional gambling addiction organisations. All this evidence left
us in no doubt, if we had any before, of the problems involved,
in particular the problems of impulse gambling. The evidence also,
just as helpfully, told of the steps necessary to minimise such
problems.
8. It was as a result of hearing such evidence that
we became very confident of the ability of agencies in Manchester,
more than anywhere else, to manage the minimisation of harm from
gambling effectively. But it will be for the Gambling Commission,
not us, monitor and minimise any harm that might develop in any
of the 17 recommended areas.
"Doorstep" and "Destination"
9. Our Panel throughout was well aware of the research
on the "destination casino" concept in that it seeks
to minimise adverse social impact by placing some distance between
the casino and the nearest residential area. The example of the
casino at Dortmund, about which you asked me in the oral hearing,
provides good evidence of this point. Situated in the woods some
11km to the south of the City Centre, and some 3 km from the nearest
southern suburb, it is clear that a definite decision to visit
has to be made by every visitor. In this respect it is a good
example of "destination casino". Yet, as I said in evidence,
its regeneration effect has been nil.
10. It was inevitable that once regeneration came
into our terms of reference that urban areas would rank more highly
than others against our criteria. Indeed, the very substantial
majority of original bidders for the regional casino were urban
local authorities, who recognised and sought such regeneration.
11. The question before us in relation to adverse
social impact therefore was in which of the areas proposed this
consideration would be minimised. Here the question became in
which of the areas it would be possible to provide a location
that was not of necessity on the doorstep of residential areas,
especially of areas already containing social problems. A number
of the big cities that we considered (including Manchester) answered
well to this consideration, but not Blackpool, where the site
proposed by the Borough Council lies next to the most deprived
area of the town. This was described in written evidence before
us as "Blackpool is an area of high resident vulnerability
to problem gambling" and "Blackpool residents, as compared
to those in the areas surrounding the location of other bids,
will be especially vulnerable with regards [to] the psychological
impact of Category A (unlimited jackpot) machines." (The
evidence of Professor Mark Griffiths of the International Gaming
Research Unit at Nottingham Trent University). It was this evidence,
among other written and oral evidence, that led to the note of
caution concerning problems of ambient gambling in Blackpool in
our Final Report (paragraph 116).
12. Please forgive me if, for the benefit less well
informed readers than yourself I now refer to our terms of reference.
The primary consideration given to us by DCMS was to ensure that
locations provided the best test of social impact. Subject to
that, one of the criteria was also to include areas in need of
regeneration (as measured by employment and other social deprivation
data) and which were likely to benefit in those terms from a new
casino. In order to ensure that the impact of the new casinos
could be assessed on the basis of a broad range of information
and experience, we were asked also to identify areas which would
provide a good range of types of areas and a good geographical
spread of areas across Britain. What was not in
our criteria was the desirability of producing a "destination
casino". Had it been so, the exercise from the beginning
would have been different. It is likely too, that different local
authorities may have put forward proposals had the criteria been
different.
Profitability
13. In considering the criterion "likely to
benefit" in regeneration terms from a new casino, it was
necessary to consider economic impact. In particular it was necessary
to consider the likely relative success of the locations
proposed in order to compare the relative scale of benefits
that could occur and be provided. Of course in the expected monopoly
situation that the legislation provides there is little chance
of a casino not being developed, but we remain firmly of the view
that some locations are likely to attract a greater level of inward
investment, be more successful than others, and so yield greater
benefits. This is an opinion founded on the experience of Panel
Members with practical experience in the field, and with great
respect, we consider that on this matter your Committee at paragraph
17 has not come to a proper assessment of the issues involved.
Site Specificity
14. While all the authorities shortlisted for a regional
casino recognised both the requirement of the Act for a competitive
licensing process and also that the Panel was concerned with selecting
local authority areas and not specific sites, they all had clear
local regeneration needs and clear planning frameworks for the
development of their areas which understandably led them to a
preference for particular parts of their area as a site for a
casino. We, as a Panel, found such an approach quite acceptable,
and it did not compromise in any way our ability to meet our terms
of reference.
Methodology
15. Your Committee's Report at paragraph 25 well
summarises the distinction between our initial sifting process
and our later consideration of the shortlisted proposals. A full
account of our decision making processes is given at Annexes G
and K of our Final Report, and we are surprised that some critics
found the processes difficult to understand.
Conclusion
16. Finally, we would like to reiterate that we conducted
our work in a rigorous and professional manner, and we stand confidently
by the recommendations made to the Secretary of State.
17. The Panel is more than content that the contents
of this letter are in the public domain and may be the subject
of public record.
26 March 2007
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