The Stage

Proposed restrictions on casino resorts with entertainment

Published Tuesday 13 April 2004 at 13:35 by Ruth Gillespie

The predicted boom in the UK of Las Vegas-style casino resorts featuring entertainment now faces severe restrictions, following recommendations from the parliamentary committee scrutinising the proposed gambling legislation.

Formed of peers and MPs from both houses of parliament, the committee has produced a report on the new gaming bill. The draft legislation was designed to remove restrictions imposed in the sixties, making the UK industry more attractive to potential overseas investors and re-establishing live entertainment in casinos.

However, gaming experts fear the report’s recommendations that large-scale casinos containing hotel and entertainment facilities should be confined to specific areas where they can bring regeneration could disrupt the plans of US giants such as MGM Mirage, which have already invested considerable time finding locations for major casino resorts in the UK.

“We reiterate our view that all resort casinos should provide regenerative benefits,” said the report. “They should be required to do so by regional planning bodies.”

MGM Mirage chief executive Terry Lanni has been quoted as saying that if the British government wanted to bring in massive investment and create significant numbers of new jobs, companies should be allowed to build casinos where they wanted.

He added: “There will be bidding wars for certain locations and I would suspect the government would do better in not trying to limit where companies can build these facilities.”

Restrictions on the number of slot machines in each venue may also deter American giants such as Isle of Capri and Las Vegas Sands, as this contributes the highest proportion of casino profits.

Under the 1968 Gaming Act, operators were prevented from using their premises for anything other than gambling. Although Whitehall has already relaxed restrictions on entertainment - in order to attract international companies willing to invest in new Vegas-style casinos - the bill is yet to be ratified by parliament. Overseas firms are expected to invest up to £6 billion in the UK over five years if the bill becomes law.

A gaming industry source said: “Some US companies will have to go back and have a rethink. A lot depends on how the Department for Culture, Media and Sport decides to define the term ‘resort casino’. We are hoping to receive answers by the end of the summer but until then the industry is in limbo. I very much doubt that the new gambling bill will produce the free-for-all that many people have predicted.”

While US investors are expected to play a major role in expanding the British gaming industry, UK operators such as Stanley Leisure and the Rank Group have also announced plans to develop major casinos following deregulation. Shares in both companies have risen as a result of the committee’s report.

Rank’s chief executive Mike Smith said: “We have consistently argued for a measured approach to the modernisation of the UK’s gambling laws and are delighted that the committee has adopted a similar stance. In line with our strategy we have continued to invest in our existing activities by relocating casino and bingo operations to bigger and better premises, as well as opening new premises under the current law.”

The government is not bound by the report’s findings but, if it does ignore the committee’s 139 suggested amendments, it could lose support for the bill and possibly delay the document’s passage into law.

Commenting on the committee’s recommendations findings, culture secretary Tessa Jowell said: “Reform is vital if we are to continue to keep out crime and in order to protect the vulnerable and particularly children. The scrutiny committee has played an important part in building a consensus behind the bill and continuing the cross party support it has already received. We will consider their recommendations very carefully and remain keen to bring the bill back before parliament as soon as we can, having taken careful account of the committee’s advice.”