The Stage

Casino restrictions harm British firms

Published Wednesday 29 December 2004 at 14:55 by Ruth Gillespie

British casino companies say they will be unable to compete against overseas firms for the licences to operate Las Vegas-style venues after UK share prices plummeted as a result of new government restrictions.

Richard Jukes, spokesman for the British Casino Association, accused the government of showing no loyalty to domestic firms and warned that its failure to consult the UK industry over the recent proposals would be reflected in the loss of jobs for British casino workers.

Last month Richard Caborn, the minister for tourism and sport, revealed that so-called regional casinos offering live entertainment would be restricted to just eight sites throughout the UK. Now he has extended this cap to both large and small-scale casinos, limiting the total number permitted under the new gaming bill to just 24 for the next six years.

Jukes said: “This appears to have more to do with the interests of overseas investors than it does about the existing industry and UK jobs. For the government to bring forward a U-turn while the bill is still in committee is unprecedented and indicative of the muddled principle on which it was created. The limit on small and large-scale casinos is unnecessary and will make it more difficult for the UK industry to bid for regional casino licences.

“Within hours of this announcement more than one third was knocked off the value of the UK industry. This could have been averted if there had been some consultation with the UK industry. It’s interesting to note that while the UK share prices sank there was a modest rise in US casino operated share prices - it says a lot about the future of the industry. This was supposed to be a modernising act but has become a more restrictive regime than is currently operating.”

David Boden, head of Rank’s gambling division, described the move as “outrageous” and warned that plans to regulate the positioning of all 24 casinos would present huge problems for the industry, with British and foreign companies competing for every licence.

Under the new proposals, a government-appointed panel will produce a shortlist of recommended locations for each category of casino by the end of 2006. This will be considered by the secretary of state before the final suggestions are approved.

Local authorities in these areas will then invite applications from gaming operators, who will compete for the now limited number of licences. Factors such as employment and regeneration potential, the design of the proposed development, financial commitments by the developer to local projects, transport links, location and the range of facilities offered will be taken into account when more than one firm bids for a particular site.

Caborn said: “The new system will allow us to test the impact of new casinos on levels of problem gambling in a number of different types of locations. It will provide an objective way of deciding the location of new casinos. It also maintains the spirit of the bill, that local people should have the final say. Local authorities will still be able to stop new casinos coming to their area. But where new casinos can open, local authorities will still have the power to ensure they get all the regeneration benefits we know these high investments can bring.”

The Gambling Bill will return to the House of Commons for a third reading after a committee finishes scrutinising it and considering the changes the government has proposed. Once a measure passes three readings, it is considered by the House of Lords, which may offer amendments that the House of Commons can accept or reject, before the Queen gives it royal assent.