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Huge amount of money at stake.

Byline: By Tim Evans

Tim Evans looks at how the new legislation on gambling will affect the hotel and leisure industry in the North-East.

The UK currently enjoys a worldwide reputation for a having a fair and uncorrupted gambling industry of which casinos form a very significant part.

But it is generally accepted that casinos remain the most vulnerable sector within the gambling industry. In almost no other environment are such high sums of money in circulation.

As of 1968, individuals wishing to operate a casino in the UK have been required to apply to the Gaming Board, where an analysis of suitability, diligence as well as financial legitimacy has generally been a successful barrier to the criminal element.

As legislation relating to the UK's gambling laws is about to be amended, heads of the hotel and leisure, gaming and property industry, wait with baited breath for the outcome.

Amendments to the Draft Bill, announced this June, caused the share price of Stanley Leisure, the UK's largest casino operator, to drop by more than 5pc, demonstrating the sense of uncertainty amongst investors, and the significance of the Bill.

While many of the proposed changes are seen as positive by both current and prospective casino operators, the cautious approach taken by the Government continues to cause uncertainty.

Gambling expenditure in the year ending March 31, 2003 is estimated at pounds 7.8bn, which funded 124,000 full-time jobs.

Gambling-related duties and taxes are significant, with around pounds 1.3bn in duties and pounds 300m in corporation tax and VAT.

The aims of the forthcoming Bill revolve around three core objectives.

Briefly the aims are as follows:

* Gambling must remain crime-free;

* Gambling must be conducted in a fair and open way;

* Children and vulnerable persons must be protected.

In delivering these objectives, the new Bill will replace three Acts of Parliament: the Betting Gaming and Lotteries Act 1963; the Gaming Act 1968 and the Lotteries and Amusements Act 1976.

Overseeing the above will be a new regulator, the Gambling Commission, replacing the Gaming Board and the Gaming Act.

The Government's unhurried development of the Bill reflects the complexity, economic value and social relevance of Gambling in the UK.

A balance must be struck between the calming of restrictions which currently frustrate development plans of both UK and overseas casino developers, alongside the level of freedom that "players" are exposed to.

There remains the potential for large-scale overseas and domestic investment.

Of principal interest to industry watchers is the abolition of the permitted area restriction, which currently limits the location of Casinos to 53 permitted areas, and the removal of the demand test, which has historically meant that prospective developers have had to demonstrate demand when applying for a licence.

MGM Mirage and Las Vegas Sands are amongst other US groups that have multi-million pound development plans on sites across the UK, while the UK's Gala group is working alongside the Las Vegas based Harahs on plans to open eight casinos. The Stanley Leisure group is reportedly looking at several sites in the North-East.

Investors with plans for large-scale "resort" casinos must continue to wait for the appointed scrutiny committee to define this size band of casino and the subsequent planning conditions and obligations of the developer.

The planning process will constitute a vital role in the development of the casino industry, with development plans and the potential involvement of regional development agencies dictating the location of any new schemes.

The sequential test will continue to apply in the same way as other leisure sector uses. If a casino was deemed "of regional significance", additional planning bodies are likely to become involved, potentially further lengthening the planning process.

* Tim Evans is the senior partner at the Newcastle office of property consultants Knight Frank.
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Copyright 2004 Gale, Cengage Learning. All rights reserved.

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Publication:The Journal (Newcastle, England)
Date:Sep 22, 2004
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