HOUSE OF LORDS
Merits of Statutory Instruments Committee
13th Report of Session 2006-07
Drawing special attention to:
Draft Gambling (Geographical Distribution of Casino Premises Licences) Order 2007
Volume I: Report and oral evidence (Written evidence published separately as HL Paper 67–II)
Ordered to be printed 13 March and published 20 March 2007
London : The Stationery Office Limited £price
HL Paper 67–I The Select Committee on the Merits of Statutory Instruments The Committee has the following terms of reference: (1) The Committee shall, subject to the exceptions in paragraph (2), consider— (a) every instrument (whether or not a statutory instrument), or draft of an instrument, which is laid before each House of Parliament and upon which proceedings may be, or might have been, taken in either House of Parliament under an Act of Parliament; (b) every proposal which is in the form of a draft of such an instrument and is laid before each House of Parliament under an Act of Parliament, with a view to determining whether or not the special attention of the House should be drawn to it on any of the grounds specified in paragraph (3). (2) The exceptions are— (a) Orders in Council, and draft Orders in Council, under paragraph 1 of the Schedule to the Northern Ireland Act 2000; (b) remedial orders, and draft remedial orders, under section 10 of the Human Rights Act 1998; (c) draft orders (including draft subordinate provisions orders) under section 1 of the Regulatory Reform Act 2001, subordinate provisions orders under that Act and proposals in the form of a draft order under that Act; (d) Measures under the Church of England Assembly (Powers) Act 1919 and instruments made, and drafts of instruments to be made, under them. (3) The grounds on which an instrument, draft or proposal may be drawn to the special attention of the House are— (a) that it is politically or legally important or gives rise to issues of public policy likely to be of interest to the House; (b) that it may be inappropriate in view of changed circumstances since the enactment of the parent Act; (c) that it may inappropriately implement European Union legislation; (d) that it may imperfectly achieve its policy objectives. (4) The Committee shall also consider such other general matters relating to the effective scrutiny of the merits of statutory instruments and arising from the performance of its functions under paragraphs (1) to (3) as the Committee considers appropriate, except matters within the orders of reference of the Joint Committee on Statutory Instruments.
Current Membership The Members of the Committee are: Baroness Adams of Craigielea Viscount Eccles Baroness Maddock Lord Armstrong of Ilminster Lord Filkin (Chairman) Baroness Thomas of Winchester Viscount Colville of Culross Lord James of Blackheath Lord Tunnicliffe Baroness Deech Lord Jopling
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Thirteenth Report
DRAFT GAMBLING (GEOGRAPHICAL DISTRIBUTION OF CASINO PREMISES LICENCES) ORDER 2007
Summary: This draft Order was laid on 1 March and permits the 17 local authorities set out in the Order to issue one premises licence each in the specific casino category allocated to them (regional, large or small). We took evidence to clarify how and why the Government had set the selection criteria for the Panel and how the Panel measured the bids against those criteria. The evidence demonstrated a difference in interpretation of “social impact”, with the Panel’s interpretation giving greater prominence to economic factors and less to the minimisation of harm from gambling, a licensing objective set by section 1 of the Gambling Act 2005. Each licence can only be issued after the authority has held an open competition for proposals and once the winner has obtained planning permission and the other necessary licences. The Government deliberately set the “best possible test of social impact” as the primary objective in the Panel’s terms of reference. We heard in evidence that the Panel gave great weight to the traceability of social impact and this significantly affected its recommendations, ruling out some locations where it felt it might be more difficult to trace the impact. The regional casino may not however be located in the same location within the licensing authority as proposed in the bid to the Panel (and thus where the Panel considered the best possible test of social impact could be assessed) because the next stage of the process requires an open competition amongst potential operators and each successful authority may award the licence to any site within its area. The draft Order will be debated in the Lords on 28 March.
This Order is drawn to the special attention of the House on the ground that it gives rise to issues of public policy likely to be of interest to the House and may imperfectly achieve its policy objectives.
1. The Department for Culture, Media and Sport (DCMS) have laid this Order under sections 175 and 355 of the Gambling Act 2005 (“the Act”) together with an Explanatory Memorandum (EM) and Regulatory Impact Assessment (RIA).
Purpose of the Order 2. The draft Order permits the 17 selected licensing authorities to issue one premises licence each in the specific casino category allocated to them (regional, large or small). Each licence can only be issued after the authority has held an open competition for proposals (in compliance with Part 8 of and Schedule 9 to the Act) and once the winner has obtained planning permission and the other necessary licences. The draft Order will be debated in the Lords on 28 March. 2 MERITS OF STATUTORY INSTRUMENTS COMMITTEE
Background 3. Such was the concern in both Houses over the potential impact of regional casinos that a Joint Committee was convened specifically to consider “the definition, location and economic and other implications of the largest casinos”. Its report, published on 22 July 2004, made a number of recommendations, including that to minimise any increase in problem gambling due to proximity to a casino, the largest casinos should be located away from residential areas and town centres1. As originally presented, the Gambling Bill proposed to leave the number of casino licences to market forces but this was unacceptable to the House of Commons: the bill was amended in Standing Committee to permit eight of each type of casino, so that the impact of an expansion in gambling could be tested. It was at this stage (16 December 2004) that the Government issued their Statement of National Policy (printed at Appendix 1 to this Report). 4. When the Bill was brought to the Lords in January 2005, this House shared the concern that the impact of the change should be properly piloted before many licences were issued. In the run up to the dissolution of Parliament, the bill was amended to reduce the first batch of licences to one regional casino, eight large and eight small and, with that limitation, the Act gained Royal Assent on 7 April 2005. The geographical distribution of the available licences is to be determined by the Secretary of State by Order subject to the affirmative procedure, and that Order is the subject of this Report. 5. The Government appointed the Casino Advisory Panel on 1 October 2005 to advise them on which of the bidding local authorities should be given permission to issue which sort of licence (the Panel’s terms of reference are printed at Appendix 2 to this Report). The Panel issued a call for bids on 31 January 2006. They published a provisional shortlist on 24 May 2006 and there was then some confusion over the process and appeals: supplementary submissions were allowed until 14 August. The shortlisted applicants for a regional casino licence were each then invited to an Examination in Public to discuss their bid and to allow other interested parties to be represented. The Final Report from the Casino Advisory Panel (“the Panel’s Report”), which listed the recommended local authorities for each type of licence, was published on 30 January 20072. Having consulted the Scottish Ministers and the National Assembly for Wales, the Secretary of State for Culture, Media and Sport laid the draft Order on 1 March 2007, endorsing the locations recommended by the Casino Advisory Panel without modification (Q77).
Our approach 6. The draft instrument is short, simply listing the chosen licensing authorities, but the recommendations have been the subject of considerable controversy. To inform our scrutiny and to help the House make a better informed decision when it is asked to approve the draft Order on 28 March, we decided to take oral evidence from Professor Stephen Crow CB, Chairman of the Casino Advisory Panel and Rt Hon. Richard Caborn MP, Minister of State at DCMS (Appendix 5). We wanted to clarify how and why the
1 Session 2003-04, HL Paper 146, paragraphs 68-9 and 82-85. 2 www.culture.gov.uk/cap/publications/finalreportcap_300107.pdf. MERITS OF STATUTORY INSTRUMENTS COMMITTEE 3
Government had set the selection criteria for the Panel and how the Panel measured the bids against those criteria, so that we could assess whether the draft Order seemed likely to fulfil the policy objectives set by section 1 of the Gambling Act 2005 and by the Government’s Statement of National Policy. In taking evidence, our intention was to improve the House’s understanding of how the selection process was undertaken: we take no view on the list of local authorities put before the House. 7. Due to the short time between this Order being laid before the House and the Government seeking the House’s approval, we have focussed on the sift for the regional casino. We felt the requirement to make only one recommendation was likely to provide the best illustration of how the factors were examined and how the Panel weighed the bids against each other. We published a call for written evidence on 5 March, with the deadline for response of 20.00 on 8 March. We published this written evidence on 12 March (HL Paper 67-II), before the oral evidence session and we append to this Report some further submissions received after the deadline (Appendix 4). We are grateful to all of the respondents for submitting their evidence within such a tight time constraint.
Gambling Act licensing objectives 8. The degree to which the Panel took the prevention of harmful effects to the community into account was relevant to understanding the degree to which the draft Order complied with the licensing objectives set by the Gambling Act 2005. Section 1 of that Act provides: “In this Act a reference to the licensing objectives is a reference to the objectives of— (a) preventing gambling from being a source of crime or disorder, being associated with crime or disorder or being used to support crime, (b) ensuring that gambling is conducted in a fair and open way, and (c) protecting children and other vulnerable persons from being harmed or exploited by gambling.” We asked the Minister how the criteria set out in the Panel’s terms of reference aligned with these licensing objectives. The Minister said that the minimisation of harm from gambling was implicit in the Panel’s terms of reference (Q81) which were drawn from the Government’s Statement of National Policy “which went through both Houses (and) was never questioned by anybody”(Q84). 9. Paragraph 92 of the Panel’s Report says: ‘The “gold standard” for a regional casino, as we see it, is a regeneration that would not only provide jobs and demand for local services in the casino itself, not only have developed with it a good quality hotel or hotels, not only add to these facilities a desired local project such as large-scale entertainment and retail opportunities or an international standard conference facility, but set in train spontaneous growth that would continually revitalise the local economy.’ We noted that this definition did not make reference to any of the Act’s objectives of preventing harmful effects to the community. 4 MERITS OF STATUTORY INSTRUMENTS COMMITTEE
10. A number of respondents to our call for evidence commented on the Panel’s apparent disregard of the body of evidence, emphasised in the Report from the Joint Committee on Regional Casinos, that to minimise the opportunity for “casual” problem gambling, the regional casino should not be located in close proximity to residential properties3. This was supported by Professor Collins’ memorandum to us which stated that “an increase in problem gambling is likely to be inhibited… if casinos are located where they are unlikely to encourage people to gamble on impulse”, that is “destination resort casinos, with a very wide catchment area, are more likely to bring greater benefits with less costs to local communities than are urban casinos whose customers come mostly from within the jurisdiction” 4. This view was corroborated by the Panel’s own digest of the international research on the impacts of casinos, for example: “To summarise the review of the three international gambling profiles, it would be seem most appropriate to locate casinos in areas with the following characteristics to lower the possible social impact casino developments will bring to the host and the surrounding area:
• Areas which can stimulate ‘destination travelling’ by having a distance buffer, i.e. gamblers have to travel for a purpose
• Areas that have no schools
• Areas with a low percentage of children and teenagers
• Areas with a low percentage of elderly population
• Areas which can capture demand from all groups to expand the target market and to avoid dependency on certain groups for the industry’s businesses and viability, especially on the vulnerable population” (paragraph 3.3.1) but that report was only delivered in November 2006, and was not used in the Panel’s selection process. 11. So we asked Professor Crow how choosing an urban location could be reconciled with the overarching Government policy set out in the Act to minimise problem gambling (QQ11-12, 38-39). Although Professor Crow was aware of the experience of Barrow in Furness, that the worst off in society can be attracted to low-end gambling (such as bingo) as a potential solution to their problems, the Panel had not taken into account that 20% of the population of Manchester is in receipt of income support, on the grounds that it was not part of the test criteria (Q39). The Professor said these issues should be addressed at the town planning stage (Q42). Similarly, Professor Crow said that the Panel was aware of the Joint Committee’s report but it would be possible to find a location in East Manchester away from residential areas (Q8). The Committee felt that, when the objectives were in tension, the Panel veered towards their terms of reference with their emphasis on the research testing of impacts rather than the minimisation of harm (Q83)
3 Session 2003-04, HL Paper 146, paragraphs 84-85. 4 HL Paper 67-II, pages 48-9. MERITS OF STATUTORY INSTRUMENTS COMMITTEE 5
which may have resulted in destination casinos being given insufficient weight in the ranking. “Chairman: As you say, you were charged by the Government with the best possible test of social impact as your primary requirement and in your evaluation you said that some locations made it easier to test that impact than others. If I recollect, you thought, for example, that it was easier to test the social impact in Manchester than it would be for Blackpool because Blackpool’s population going to the casino would come from a wider area. Professor Crow: Yes. Chairman: … does that not mean that in practice you tended to knock out any consideration of a destination casino on that ground? Professor Crow: If by “destination casino” we mean one where most of the customers come from a long distance --- Yes. Chairman: So your interpretation of the meaning of the terms of reference that you were given was effectively that the best possible test for methodological reasons made it virtually impossible for you to recommend to the Government that there should be a destination casino? Professor Crow: Yes.(QQ23-27)
Selection criteria 12. The Government’s Statement of National Policy (Appendix 1) initially expressed the selection criteria as: “a good range of types of areas, and a good geographical spread of areas across Britain; The Panel will also want to ensure that those areas selected are willing to license a new casino. Subject to these criteria, the Panel will be asked to choose areas in need of economic development and regeneration (as measured by employment and other social deprivation factors) and likely to benefit in regeneration terms from a casino.” (paragraph 9) By the time the Panel’s terms of reference were issued in August 2005 (Appendix 2), the primary consideration had changed to “to ensure that locations provide the best possible test of social impact”. We felt this change was significant and asked the Minister why these criteria had been chosen (Q81). 13. A theme that emerged from the written responses was that the terms “social impact” and “regeneration” were open to significantly different interpretations. For example, it is possible to consider regeneration in terms of its absolute benefits, say its contribution of £x million a year to the local economy, or it can be considered relatively: where would such an investment produce the greatest impact on a local economy or society. Different locations could be recommended depending on which meaning was adopted (QQ29-32). 14. The Committee therefore asked both the witnesses to give their interpretation of these terms. In relation to regeneration their views were 6 MERITS OF STATUTORY INSTRUMENTS COMMITTEE
closely aligned. They also agreed that the outcome was dependent on the how active the local authority was likely to be. Professor Crow related that the citizens of Dortmund (Germany) reported virtually no regeneration had resulted from their very much bigger casino (Q19). The Minister said it was down to the selected local authorities “to have a beauty contest… to make sure you get as many as possible to bid for those licences so you can extract the maximum out of that” (Q89) and that is why the Government brought the premises licence into the Act. Local authorities have a very powerful tool in the planning obligations in Schedule 9, which should bring “great potential for investment way beyond the infrastructure of the casino itself” (Q92). 15. Professor Crow interpreted social impact widely, considering both the positive and negative effects (Q7).The Minister’s definition was narrower, he said “in crude terms, it is the effect in terms of problem gambling,”(Q84). He added “If we get economic regeneration, that is fine but we will make sure that we actually keep any social impact to a minimum.”(Q84) We felt that this demonstrated a difference in the interpretation of social impact, with the Panel’s interpretation giving greater prominence to economic factors and less to the prevention of harm.
Profitability 16. It also seemed to us that the Panel had added some elements to the selection criteria, for example their own assumptions about relative profitability. The Committee asked questions about the Panel’s capacity to assess this and whether it ought to have been a material consideration as it was not part of the terms of reference. The Panel also gave weight to their perception of an authority’s ability to manage the process and its consequences. Professor Crow argued that it required an active local authority to maximise the regeneration potential (QQ51-4). The Committee noted that whilst the latter consideration might be common sense, it was not in the terms of reference. 17. Paragraph 101 of the Panel’s Report says that “the regeneration benefits of a casino proposal must bear a relationship to its potential profitability”. The economic viability of the proposal also encompasses a range of other relevant considerations such as the effect of competition on the bidder: casinos already exist in 11 of the 17 recommended locations, so we wondered how the impact of the new casino will be distinguished from the effects of the current casinos and whether the new casino might simply displace custom and employment opportunities from existing attractions rather than generate new jobs or tourism. Professor Crow said the Panel gave the proposals’ profitability considerable weight as a means to distinguish between bids (Q63) and felt that it would be maximised in a large place (Q64). We accepted this as generally relevant but queried the assertion in relation to the regional casino: because it will have a national monopoly for next decade, it is fair to assume that it would make a significant profit wherever it was located (Q66). Adding maximisation of profit into the consideration due to its potential impact on the effectiveness of regeneration however seemed to have a greater weight on the Panel’s recommendations than minimisation of harm. MERITS OF STATUTORY INSTRUMENTS COMMITTEE 7
Composition of the Panel 18. The written evidence raised questions about the composition of the Panel. Paragraph 8 of the Statement of National Policy, stated that “The Panel will collectively have knowledge and expertise in a range of matters including planning, securing regeneration, tourism and addressing the social impacts of gambling.” While the expertise of the members eventually appointed to the Panel in planning issues is self-evident, their experience of analysing social issues or the impact of gambling is less apparent, however Professor Crow stated that its members had the necessary skills (Q10) and the Minister strongly supported this (Q85).
Objective of the Order 19. From our reading of the written evidence it became clear that there may be a general misunderstanding about the objective that the Panel had been set: their task was not to select locations which were most in need of regeneration, or even likely to produce the greatest benefits from a regeneration project, although both of these aspects were taken into account. The prime objective of the Panel was to select the locations which provided the best possible test of social impact. The Panel appeared to interpret this as locations where the effects of social impact and regeneration were most identifiable and traceable: (QQ13, 15, 17, 23-7) 20. In essence the Panel was selecting candidates for a research project. The Statement of National Policy requires “the impacts to be assessed in a range of areas and types of location that might be suitable (including, for example, urban centres and seaside resorts across different parts of the Britain)” (paragraph 5). So, some of the less obvious choices of the Panel are explained; although Wolverhampton scored quite low in the initial rankings it was awarded permission to issue a licence for a small casino largely for its novel concept of a casino linked to a floodlit race course. Similarly, “while Bath does not have the same level of pressing regeneration needs that many others face” (Panel Report paragraph 227) it offers an opportunity to examine the impact of a small casino aimed at well-to-do gamblers in a heritage setting. The House may wish to assess whether this emphasis on the needs of the research process may have over-dominated the Panel’s recommendations to the exclusion of more common sense issues of where there would be least harm or where the regenerative power of a regional casino might matter most. 21. Another requirement which overlaid the Panel’s choice was the requirement for “a good geographical spread of areas across Britain” (Statement of National Policy paragraph 9). Although the map on page 10 of the Panel Report seems to show clusters and gaps, Professor Crow said that the list includes a broad mix of types of location with at least one casino in every English region, one in Scotland and one in Wales. (Q6) 22. Several written responses also suggested that the selection criteria should have changed when the number of available licences for a regional casino was reduced from eight to one, as having a single research subject inhibits the ability to compare effects and to identify what results are ascribable solely to the casino and not to other, local, variables. The Minister said this would have skewed the sample and the 17 casinos had been selected to demonstrate 8 MERITS OF STATUTORY INSTRUMENTS COMMITTEE
a range of characteristics (Q88). For the same reason he said the Government would not split the list into two or more statutory instruments to allow Parliament a free vote over the location of the regional casino (Q79).
Methodology 23. In the written evidence, the Panel’s Call for Proposals (Annex E of the Panel’s Report) was generally thought to be clear about what was required and by when. There was however some confusion over whether there was an appeals process (paragraphs 39-47 of the Panel’s Report), which resulted in further submissions being allowed. Some of the written evidence expressed concern as to whether this was fair competition since, coming after the initial rankings had been made public, it gave bidders an opportunity to “copy cat” the evidence of those who had been successful in the first cut. Similar concerns were raised over the handling of the Examination in Public sessions. The Professor was robust in his defence of the procedure saying that all the bidders had had equal opportunities to comment or to reply to comments made about them. (Q60) 24. Although we found the Panel’s report clear and honest in its explanation of the sequence of events and of the difficulties that they faced, we wanted a better insight into how they set about their task of assessing the bids. Some of the bids were based on a particular site (e.g. Greenwich, Luton) some related to a wider area (e.g. Glasgow, Bath), some bids became more specific during the appeals stage (e.g. Solihull moved from a non-specific bid to identifying the National Exhibition Centre as its preferred site). We asked Professor Crow how the Panel had addressed these differences since, we assumed, the more specific the location the more precisely the information about its characteristics could be identified: factors like its regeneration need, infrastructure or tourism potential. Professor Crow said this was where the Panel’s expertise was used to weigh up the evidence and that sometimes the more detailed data that a specific site allowed had acted against the bid (QQ56-7). 25. One of the most frequently raised issues in the written evidence was a lack of understanding of the ranking system used: the Panel’s rankings changed dramatically from their initial evaluation to their final recommendations (their initial evaluation is set out at Appendix 3). The Committee felt that, while much of the Panel’s activities had been open and transparent, there were gaps in the account. The Panel published their initial evaluation on 24 July 2006, although the provisional shortlist (the top end of that initial evaluation) had originally been identified in May, without any clear explanation of how the marks had been awarded. One respondent queried why eight applicants for a regional casino licence had been short listed as the figure seemed arbitrary. Others asked how Manchester, the eventual winner, had progressed from the bottom of the regional short list to the top. There is no equivalent final scorecard and the verbal analyses offered in Chapters 7 and 8 of the Panel report can seem subjective and are open to criticism for inconsistent use of criteria. We asked the Panel Chairman to explain (Q49). He said that the ranking system had only been used to derive a short list from the paper applications made by nearly 70 local authorities. After that, a broader approach had been possible based on the additional submissions from the local authorities and other parties and also on the Examinations in MERITS OF STATUTORY INSTRUMENTS COMMITTEE 9
Public (QQ57-8) although we note that the transcripts of those Examinations have still not yet been published. 26. We asked how far the Panel’s recommendations had been based on the original applications and how far on independent analysis. We asked how the Panel had validated the applications, which were all to some extent promotional and pitched at making a sale and might therefore have been over-optimistic in their assessment of the potential benefits. The Panel’s Final Report states, at paragraph 95, that bids tended to use supply-side models rather than demand-side models and this required the Panel to use their “expertise and judgement to assess the likely comparative employment and other regeneration benefits”. Professor Crow said that this had required the Panel to apply its expertise as some of the claims made in the bids were “far fetched” (Q21). We would have preferred it if more of the detail of the Panel’s assessments had been set out in their Report.
Next steps 27. The local authorities set out as licensing authorities in this Order must now make the opportunity of obtaining the licence open to all operators. If there is more than one proposal that satisfies the regulatory requirements set out in the Act, then the local authority is required to run the second stage of the process as a competition. Paragraph 5(3)(a) of Schedule 9 to the Act requires the authority “to determine which of the competing applications would, in the authority’s opinion, be likely if granted to result in the greatest benefit to the authority’s area”, although what the criteria are for determining “the greatest benefit”, have not yet been decided5.The chosen operator will also need to have an operating licence and planning permission and the Statement notes that “the fact that an applicant’s proposal may be the preferred option in the competition will not guarantee planning permission.” (paragraph 22). 28. We also sought clarification of how the competition for the licence could be fair, when some authorities have already identified a preferred operator; for example in Southampton City Council’s written evidence they state that their initial submission was subsidised by an interested operator which commissioned £35,000 of information and data for them6. Professor Crow said that the Panel had deliberately not considered this, as they regarded it a matter for the next stage of licensing. The Minister said Paragraph 2 of Schedule 9 to the Act says licensing authorities must comply with regulations about inviting competing applications and the Secretary of State has written to the local authorities to remind them of their obligations under the Act7.(Q89 &94). 29. For us, the key question was whether the authorities which are about to be allowed to issue licences are restricted to the site proposed in their bid or to the whole area of their authority. The Minister confirmed that the law allows the local authority to determine the most appropriate site anywhere within
5 The Minister’s further memorandum (printed at Appendix 5) states that draft guidance has recently been issued for consultation. 6 HL Paper 67-II, page 113 7 The Minister’s further memorandum (printed at Appendix 5) addresses this in more detail. 10 MERITS OF STATUTORY INSTRUMENTS COMMITTEE
their jurisdiction: “That is entirely a matter for the local authority. It is the local authority that now has the licence, not a particular site.”(Q96) 30. For some authorities this is a logical consequence to their bid, they offered a range of sites and will now select the best of them. However for the proposed regional casino, the Committee had concerns that this flexibility has the potential to undermine the premise on which the bid was selected: Baroness Thomas of Winchester: So Manchester might decide that it does not want the site to be in East Manchester? It might want it to be somewhere else in Manchester. Mr Caborn: Absolutely. That is a discussion that the local authority will have (Q97). 31. When asked whether this was an error on the part of the Panel who had made it clear to us, both in their Report and in Professor Crow’s oral evidence, that the location of East Manchester influenced their decision in favour of Manchester. Mr Caborn replied: “All I can say is that that is not what the Act says. The Panel knew exactly what the Act was saying and when they gave that licence out, that was a licence to the local authority, that local planning authority, not an individual site.” (Q100) 32. When a licence application is being considered, the premises licence procedure allows for interested parties, including local residents and businesses, to express views against the licence. We asked how this consultation could be genuine, given that each local authority has invested heavily in its proposal. We also asked how sure the authority could be of local support as the Panel had described the bidders’ approach to consultation with local people as “unexpectedly patchy” (the Panel’s Report paragraph 106)(Q35). 33. We asked the Minister what the fall back position was in relation to the allocation of licences. For example, if a proposal failed to meet the licensing criteria, or if a local authority withdrew its bid, would a new location be chosen for such a licence; and, if so, how? The Minister said he had not thought about this (Q107) although his further memorandum goes into more detail8. 34. We asked under what circumstances a licence might be revoked: might this be done if a casino only generated half the jobs set out in the original bid? The Minister said this would be a matter for the Gambling Commission who could impose sanctions if the enterprise did not comply with the conditions of its operating licence. Other evidence of success or failure would come from the various evaluation projects set in train (Q108-9). The Secretary of State may change the maximum number of available licences, again by order subject to affirmative resolution, but this is not likely to happen for 8-10 years (Q111-113).
Conclusion 35. We considered the policy objectives of this Order on two levels: first its compliance with the licensing objectives set out on the face of the Gambling
8 Appendix 5. MERITS OF STATUTORY INSTRUMENTS COMMITTEE 11
Act 2005 which require the prevention of harm from gambling; and secondly, whether the 17 authorities selected, if allowed to license a casino, would offer “the best possible test of social impact”. 36. It is clear from the evidence sessions that, although aware of the concerns of the Joint Committee and others, the Panel’s interpretation of their sift criteria did not give high priority to the prevention of harmful effects to the community from gambling. The Minister stated that this objective was implicit in the Panel’s terms of reference (Q81) and would in any event be addressed in the next stages of the process when the local authority considered applications for planning permission and the Gambling Commission considered applications for an operator’s licence (Q82). The evidence session clarified the Panel’s interpretation of the criteria it had been given and their 17 recommendations flow from that. Whether the Panel’s interpretation of their terms of reference matches that of the Government, and the degree to which the terms of reference reflect the statutory licensing objectives, is an issue of public policy likely to be of interest to the House. 37. In relation to the “best possible test of social impact”, Professor Crow emphasised that the key element in their selection process had been the “traceability” of the effects of placing a casino in this or that location. The Minister made it clear that the list of 17 comprised a structured sample for testing the social impact and that Parliament must accept or reject it in its entirety (Q 79). 38. This Order would permit each of the named local authorities to issue one casino licence. If, in the course of the competition they must hold, an operator with a viable proposal offers the local authority sufficient incentives (of the type permitted under Schedule 9 to the Act) to convince it that the “greatest benefit” to the authority’s area would be obtained from a casino sited somewhere other than the site put forward in the bid assessed by the Panel, then the authority is free to, and may be obliged by law to, grant the licence to that location. Although apparently aware of this when making its recommendations, the Panel seems to have been strongly influenced by some bids attached to specific sites, for example Wolverhampton or Solihull. 39. In the Panel’s recommendation for the regional casino licence the specific location appears fundamental. The Panel’s Final Report says “Although Greater Manchester demographics are close to the national profile, it would not be easy to trace the city-wide social impact of the proposal against the background of many other factors in such a large city region. This would be less true, however, of East Manchester, where it would be relatively easy to adduce impacts, favourable and unfavourable, in this very deprived sector of the city.” (paragraph 178). The Government deliberately set the “best possible test of social impact” as the Panel’s primary objective. We have heard in evidence that the Panel gave great weight to traceability of social impact in making its selections and that this significantly affected its recommendations, ruling out some locations where it felt it might be more difficult to trace the impacts as compared to others. We note however that the regional casino may not however be located in the same location within the licensing authority as proposed in the bid to the Panel (and thus where the Panel considered the best possible test of social impact could be assessed) because the next stage of the process requires an open competition amongst 12 MERITS OF STATUTORY INSTRUMENTS COMMITTEE
potential operators and each successful authority may award the licence to any site within its area. We therefore draw this Order to the special attention of the House on the ground that it may imperfectly achieve its policy objective. MERITS OF STATUTORY INSTRUMENTS COMMITTEE 13
APPENDIX 1: GOVERNMENT STATEMENT OF NATIONAL POLICY 1. This statement is issued on behalf of Her Majesty’s Government. 2. The Government’s policy on casinos is based on the three broad objectives of the Gambling Bill: • To protect children and other vulnerable people from harm; • To prevent gambling being a source of crime or disorder and; • To ensure that gambling is conducted in a fair and open way. Britain has a low level of problem gambling compared to other countries (less than 1% of the population) and the Government is committed to maintaining this record. Casinos are already tightly regulated and have strict controls in place. The Gambling Bill will strengthen the existing safeguards. There are currently a number of regulations, however, which the Government believe are outdated. The 24-hour rule, the ban on advertising and the permitted areas rule unnecessarily restrict customer choice and discourage investment and economic regeneration. The tourism and leisure industries are increasingly significant elements of the economy. 3. Tourism alone accounts for 4.4% of our GDP. The Government believes that the casino proposals in the Bill, with its emphasis on increased regulation, have the potential to make a positive contribution to the success of these sectors. In addition Regional casinos, as major developments, offer clear potential for regeneration of areas across Britain. They will provide not just a range of gambling activities, but may include hotel accommodation, conference facilities, restaurants, bars, areas for live entertainment and other leisure attractions. The benefits of such a development could go much wider than the location of the casino itself. There are many parts of the country which could benefit from the regeneration that these kinds of leisure developments can offer. 4. The Government recognises, however, that the casino proposals in the Bill represent a significant change and we need to take a cautious approach in order to assess whether their introduction leads to an increase in problem gambling. The Government has taken the view that the risk of an increase in problem gambling will be reduced if a limit is imposed on the number of casinos. We have therefore decided to set an initial limit on the number of Regional, Large and Small casinos of 8 each. The identification of operators and locations for the new casinos will be subject to broadly the same arrangements in each case. 5. The Government believes that, in order properly to assess the impact of these new casinos, there needs to be a sufficient number of casinos in each category to allow the impacts to be assessed in a range of areas and types of location that might be suitable (including, for example, urban centres and seaside resorts across different parts of the Britain). A limit on Regional, Large and Small casinos of 8 each is consistent with this aim while at the same time ensuring that any risk of problem gambling is minimised. The Government has decided to appoint an independent Advisory Panel to recommend the areas for the Regional, Large and Small casinos. Following the Panel’s advice the Government will decide the areas where each of the new casinos may be licensed. 6. Once an assessment has been made of the impact on problem gambling of the limited number of new casinos, it will be easier to judge the continuing need for a limit. No earlier than three years after the award of the first premises licence, the Government will ask the Gambling Commission to advise on whether the introduction of the new types of casinos has led to an increase in problem gambling or is increasing that risk. We believe such a 14 MERITS OF STATUTORY INSTRUMENTS COMMITTEE period is necessary to ensure a full assessment can be made of the impact of the new casinos. If the Government, on the basis of the Gambling Commission’s advice decides to propose that more casinos may be licensed then the Order providing for this will need to be approved by Parliament. We will also want to assess, with the help of regional bodies, what the regeneration and other economic outcomes have been. 7. This policy statement sets out our policy on casinos in more detail below, including the role of the Advisory Panel in recommending areas for the new casinos and arrangements for casinos which already have a licence under the Gaming Act 1968. The proposals for casinos outlined here are for England, Scotland and Wales. Responsibility for the planning system in Scotland and Wales is for their respective devolved administrations. None of the proposals here will affect the ability of local authorities to refuse to have a new casino of any size category in their area.
The Advisory Panel on new casino locations 8. The Secretary of State for Culture, Media and Sport will appoint an independent Advisory Panel to advise her on the areas in which the new casinos should be located. The Panel will collectively have knowledge and expertise in a range of matters including planning, securing regeneration, tourism and addressing the social impacts of gambling. Clearly, all Panel members must be able to demonstrate independence from any potential interested parties and must have an appreciation of the need for impartiality. 9. In order to ensure that the impact of the new casinos can be assessed on the basis of a broad range of information and experience, the Advisory Panel will be asked to identify areas for the new casinos which will provide: • a good range of types of areas, and a good geographical spread of areas across Britain; • The Panel will also want to ensure that those areas selected are willing to license a new casino. Subject to these criteria, the Panel will be asked to choose areas in need of economic development and regeneration (as measured by employment and other social deprivation factors) and likely to benefit in regeneration terms from a casino. 10. The Advisory Panel will invite views from interested parties. In taking forward its work it will in particular invite the Regional Planning Bodies in England to identify a list of broad locations for Regional casinos emerging from their work on the Regional Spatial Strategies. Before the Advisory Panel finalises its recommendations on areas for Regional casinos it will need to ensure that these areas are compatible with the broad locations identified in England in Regional Spatial Strategies or in any draft revisions of Regional Spatial Strategies before the First Secretary of State. 11. The Advisory Panel will be asked to offer Ministers a list of up to 8 recommended areas for each of the three categories of casino. The Secretary of State will consider the Panel’s recommendations. After consulting the Scottish Executive and the Welsh Assembly Government, the Secretary of State will then decide which areas to designate. 12. The Panel will be able to begin its work in the course of 2006, taking account of views put forward to Regional Planning Bodies as they progress the preparation of revisions of Regional Spatial Strategies, and of local authorities as appropriate. We do not expect it to complete its work before the end of 2006. MERITS OF STATUTORY INSTRUMENTS COMMITTEE 15
Planning for casinos 13. In England, Regional Planning Bodies as part of their revision of Regional Spatial Strategies will need to consider possible broad locations for Regional casinos within their region. Their proposals will then feed into the recommendations of areas for the initial eight Regional casinos by the Advisory Panel. In revising their Regional Spatial Strategies, Regional Planning Bodies need to take into account national planning policy guidance. Planning Policy Guidance Note 6 “Planning for Town Centres and Retail Developments”/ draft Planning Policy Statement 6 “Planning for Town Centres”, Planning Policy Guidance Note 13: “Transport” and the two joint statements already provide a comprehensive policy framework for casino development. 14. The Government does not consider that a separate national planning policy statement on casinos is required. However, it will consider whether there needs to be further clarification or development of its planning policy in respect of casinos in particular, in finalising PPS6. 15. For all three categories of casinos, the identification of specific sites will be for local planning authorities in their local development framework, having regard to national policy and the Regional Spatial Strategy. Local planning authorities will also be responsible for deciding applications for casino developments. 16. Operators will be required to apply for planning permission in the usual way and all applications will be considered on their merits in line with national and local planning policies. Applications may come forward at any stage. Decisions on whether they should be called in for decision by the First Secretary of State will be made in light of the Government’s call-in policy and the particular circumstances of the case. 17. It will be for the devolved administrations to decide to what extent these considerations should apply to them.
The operating licence 18. The Gambling Commission will award operating licences to companies on the basis of the usual licensing criteria, but incorporating an additionally stringent test of social responsibility to reflect the fact that Regional, Large and Small casinos will present hitherto untested risks of social harm. Therefore, operators will need to demonstrate a commitment to: ensuring effective measures for reducing the risks posed to vulnerable people by casino gambling products and the environment in which they are supplied, and making available information, advice and assistance to people using the casino who may be affected by problems related to gambling. The Commission will take account of the fact that greater commitment and resources is likely to be needed in the case of Regional casinos because of the greater risk they pose, particularly because of the availability of Category A machines. There will be no limit on the number of operating licences that may be granted.
The premises licence 19. A local licensing authority will only be able to award a casino premises licence if one has been identified for its area. The process for awarding a premises licence will be open to all operators. It will have two stages. The first stage will be a regulatory test to ensure that all proposals satisfy the regulatory premises licensing requirements already in the Bill. The second stage will be triggered where there are more applications for casino premises licences than the local licensing authority is permitted to grant. 16 MERITS OF STATUTORY INSTRUMENTS COMMITTEE
20. The second stage of the process will be a competition held by the local authority on the wider casino proposal. We will consult with the Local Government Association and others on how the competition should be conducted. The competition could be judged on a wide range of issues, reflecting the issues that are important in the local area, local concerns and priorities. These may include, for example, employment and regeneration potential, the design of the proposed development, financial commitments by the developer to local projects, location, range of facilities and other matters. The local authority may wish to provide an opportunity for consultation with local people. The local authority would set out its priorities and concerns in a set of objective key considerations and it will then invite operators to submit entries to the competition. The eventual winner of the competition will be eligible for a full premises licence once he has obtained planning permission and the casino has been built. 21. The operator will therefore need to have an operating licence, a premises licence and planning permission. The planning permission is likely to be subject to a planning obligation. 22. The premises licensing process and the planning consent process will need to be conducted taking account of the need to clearly separate the licensing and planning functions. ODPM and DCMS will issue guidance to local authorities on the propriety issues surrounding these processes. The fact that an applicant’s proposal may be the preferred option in the competition will not guarantee planning permission. Once planning permission has been granted and the casino has been built, the operator will be able to apply for a full premises licence, which he could expect to obtain provided there has been no material change in the proposals since the competition. Casinos which already have a licence under the Gaming Act 1968 23. The arrangements described above for Regional, Large and Small casinos are aimed at minimising the risk of problem gambling from an increase in the number of casinos, particularly from a proliferation of high stake and high prize gaming machines. Existing casinos will be allowed to continue to operate, and to have the opportunity to compete for the new licences. But the Government does not believe it would be appropriate to allow them to have all the new casino entitlements in circumstances where a limit is imposed on the establishment of new casinos. 24. Accordingly, we propose that there will be no size requirements on existing casinos and they will not be subject to the ban on advertising and the 24-hour rule. They will, however, be restricted to their current gaming machine entitlement of 10 gaming machines of up to Category B and they will not be allowed to provide bingo or betting on real or virtual events. 25. Arrangements will be made to ensure that existing casino businesses can in the future be transferred to new owners and to new premises if the current premises for some reason become unavailable (such as end of lease or fire), so long as it is within the existing licensing area. A company operating a casino which already had a licence under the 1968 Act may apply for a Regional, Large or Small casino premises licence. If it is awarded one of them for an existing casino, then it will be able to operate it with all the new entitlements authorised by the new licence. 16 December 2004 MERITS OF STATUTORY INSTRUMENTS COMMITTEE 17
APPENDIX 2: CASINO ADVISORY PANEL: TERMS OF REFERENCE 1. The Secretary of State will ask the Casino Advisory Panel to assist her in the exercise of her order making powers under Section 175(4) of the Gambling Act 2005 to determine the geographical distribution of casino premises licences. For this purpose, she is required to specify in the order which local authorities should be permitted to issue casino premises licences of a specified kind, and how many of each type of casino premises licence each specified local authority should be permitted to issue. The criteria against which the Panel will assess these submissions were set out in the Government’s national policy statement on casinos published on 16 December 2004. The primary consideration will be to ensure that locations provide the best possible test of social impact. Subject to this, the criteria will also be: • to include areas in need of regeneration (as measured by employment and other social deprivation data) and which are likely to benefit in these terms from a new casino; • to ensure that those areas selected are willing to license a new casino. 2. The Secretary of State has asked the Panel to make its recommendations to her by the end of 2006.
Department for Culture, Media and Sport August 2005 18 MERITS OF STATUTORY INSTRUMENTS COMMITTEE
APPENDIX 3: CASINO ADVISORY PANEL’S RANKING OF PROPOSALS FOLLOWING THEIR INITIAL EVALUATION
NB this first stage ranking did not in itself determine the outcome of the sifting, but rather was used by the Panel in conjunction with detailed discussion. For further information on the process please see the document ‘The First Stage Sifting Process’
Regional Large and Small Bradford (L) 29 Harrogate (S) 29 Greenwich 67 East Lindsey (S) 59 Falkirk (L) 27 Glasgow 66 Gt Yarmouth (L&S) 54 Maidstone (S) 27 Blackpool 65 Luton (L/S) 53 Sunderland (L) 26 Sheffield 62 Solihull (L) 53 Swindon (S) 24 Brent 58 Newham (L) 52 Ipswich (L&S) 22 Newcastle 58 Bath &NES (S) 51 Renfrewshire (L/S) 22 Cardiff 57 Canterbury (L/S) 51 Dover (L&S) 22 Manchester 57 Southampton (L) 51 Derby (L/S) 22 W Dunbarton 55 Leeds (L) 50 Cannock Ch (L) 17 Havering 55 Milton Keynes (L&S) 49 Surrey Heath (L) 13 Gt Yarmouth 54 Dumfries & Gall (L/S) 49 Sevenoaks (S) 12 Southend 54 Middlesbrough (L) 49
Solihull 53 Bournemouth (L/S) 48
Coventry 51 NE Lincs (S) 47 (L&S) = Large and Small wanted Southampton 51 Restormel (L/S)47 (L/S) = Large wanted, fallback Leeds 50 Hastings (S/L) 47 Small Wakefield 49 Brighton (L&S) 42 (S) = Small wanted Middlesbrough 49 Swansea (L&S) 41 Hull 40 Scarborough (L&S) 40 Thurrock 36 Hull (L) 40 Dartford 36 Torbay (L/S) 39 Dudley 36 Sefton (S) 39 Chesterfield 36 Leicester (L/S) 38 Midlothian 32 Chelmsford (S/L) 38 Newport 32 Peterborough (L/S) 37 Sunderland 26 Wolverhampton (L/S) 36 Ipswich 22 Thurrock (L) 36 Dartford (L) 36 Dudley (L&S) 36 Chesterfield (L) 36 Mansfield (L/S) 35 South Tyneside (L/S) 34 Carlisle (L/S) 34 Westminster (L/S) 34 Chester (S) 34 Salford (L) 33 Shepway (L) 32 Newport (L) 32 Taunton D (L) 30 St Helen’s (L/S) 30
MERITS OF STATUTORY INSTRUMENTS COMMITTEE 19
20 MERITS OF STATUTORY INSTRUMENTS COMMITTEE
APPENDIX 4: FURTHER WRITTEN EVIDENCE
Letter from Holme Roberts & Owen on behalf of the Anschutz Entertainment Group (This letter should have been printed as a preface to the memorandum printed at pages 38-42 of HL Paper 67-II.) 1. We are writing further to the Call for Evidence issued by the Select Committee on the Merits of Statutory Instruments, Draft Gambling (Geographical Distribution of Casino Premises Licenses) Order 2007. 2. We represent the Anschutz Entertainment Group, the long-term lessee of the former Millennium Dome, now called The O2. As such they were and are an interested party to the entire process leading to the selection of the licensing authority for the regional casino, and have followed the Casino Advisory Panel (CAP) proceedings with the utmost attention. 3. Attached hereto are our client’s responses to those questions with which our client may be uniquely positioned to assist the committee. You will see that our responses include observations about the fairness, clarity and transparency of the selection process; and, in the light of that, about the Secretary of State’s decision to lay a draft Order mirroring the CAP’s recommendations without herself considering their merits or inviting further submissions from the public or interested parties. In those circumstances we wish to invite the Committee to draw to the attention of the House the deficiencies in the process culminating in the laying of the draft Order. 4. In rejecting the possibility of a further round of consultation before laying the draft, the Secretary of State has specifically misunderstood the extent of consultation undertaken as part of the CAP process. There plainly was not a “16 month period of consultation”: even on the Secretary of State’s dates in the Explanatory Memorandum, the maximum period was between 31 January 2006 and 30 January 2007, being 12 months and not 16. Moreover, of that the meaningful period of “consultation” cannot have gone on beyond the end of the last examination in public (EiP) on 8 September 2006 and the following post-EiP response, which we believe to have ended approximately late October 2006. The rest of the period was taken up with the CAP’s decision-making process on its report and recommendation. 5. Adding to the concerns about the flawed nature of the process, there is an overwhelming case for a further round of consultation, and proper consideration of the response with an open mind, before deciding on the terms of the draft Order. At the very least, a further round of consultation by the Secretary of State would provide an opportunity to correct the worst of the flaws in the original process before a further draft is laid. 6. Our client would be happy to assist the Committee with respect to any clarifications or further information they might request. 8 March 2007 MERITS OF STATUTORY INSTRUMENTS COMMITTEE 21
Letter from Sir Howard Bernstein, Chief Executive of Manchester City Council 1. The Merits Committee is meeting this afternoon to take evidence on the draft Gambling Order 2007. I am writing to correct a number of the inaccurate statements concerning Manchester in the evidence submitted to the Committee by Blackpool Council and in the submission of Joan Humble MP. 2. In relation to paragraph 35 and the final bullet point in paragraph 2: 3. It is a matter of record that in 2004 Manchester conducted a competition in response to interest from the market for a destination casino at Sportcity, East Manchester in which a consortium lead by Kerzner International was selected as preferred developer. However, following amendments to the then Gambling Bill, the Council reported to its Executive that the negotiations for a contract with the consortium had been halted. The Council made it clear to the Casino Advisory Panel that it had never entered a contract with Kerzner, that it intended to hold an open competition for the casino licence and that the outcome of the 2004 competition served as an example of what could be achieved. 4. In his opening speech to the Casino Advisory Panel, Sir Howard Bernstein said: “In 2004 we held a competition which attracted firm offers from eleven casino operators which we reduced to five bids which all showed the viability of a regional casino. We didn’t conclude a contract because we are committed to holding an open and fair competition under the Gambling Act 2005. We expect that competition to yield greater benefits than our earlier competition because it is now a unique opportunity. Nonetheless the winning bid from our earlier competition provides an example of what can be achieved in Manchester.” 5. As demonstrated at the CAP, the regeneration case for the East Manchester site is powerful but paragraph 5 of Schedule 9 of the Gambling Act 2005 requires us to hold a competition to award the licence and in so doing to obtain the greatest benefit for Manchester. For this reason in our submission to the CAP and since that time we have made it clear that we will consider applications for a license for any site in Manchester as any authority given the right to award a casino licence is obliged to do by the law. 6. In relation to paragraph 30, the Council’s introductory statement to the Casino Advisory Panel was a balanced introduction to the Council’s case and was not disproportionately devoted to undermining the Blackpool or Greenwich case. It addressed issues which were central to the Council’s case and required consideration by the CAP in order for them to make a fully informed decision; in particular, the Council addressed the draft Regional Spatial Strategy which the Council considered was fundamentally flawed. 7. In response to the submission from Joan Humble MP, she states that “it is our understanding that the proposal has never even been before the local Council” This is not correct. The Council’s Executive has considered regular reports on the casino bid which has also been discussed in Council. In addition, the Council’s licensing policy which refers to the Council’s bid for a regional casino and its criteria for selecting a regional casino operator has been subject to public consultation and has been approved by full Council. 13 March 2007
22 MERITS OF STATUTORY INSTRUMENTS COMMITTEE
Letter from Herbert Smith on behalf of Leaguenotion 1. We have been acting for Leaguenotion in relation to its opposition to Blackpool’s bid for a regional casino including attending at the EIP with our client. 2. We note that our client has supplied you with written evidence in relation to the draft Gambling (Geographical Distribution of Casino Premises (Licences) Order 2007. Our client has asked us to reiterate its view that Blackpool Borough Council was treated fairly and appropriately by the Casinos Advisory Panel and indeed that the Council made no complaint about the process at the time. Our client would ask that the Committee note the way in which the CAP gave Blackpool Borough Council a fair opportunity to present its case and the way in which the CAP carefully evaluated the evidence. Our client is concerned that after careful examination of the evidence by the CAP, Blackpool Borough Council and its supporters should not now seek to encourage the Committee effectively to act as an appellate body against the procedure and findings of the CAP, particularly given the much more limited material available to your Committee. Given the extent to which so many members of both Houses have expressed strong views on relevant matters our client would fairly question the extent to which public confidence would be maintained in the independence and impartiality of any Parliamentary committee which it might be suggested be set up now in effect to re-run the evaluation process with which the CAP was charged. 13 March 2007 3638711001 Page Type [Ex 1] 19-03-07 21:38:50 Pag Table: LOENEW PPSysB Unit: PAG1
APPENDIX 5
Minutes of Evidence
TAKEN BEFORE THE SELECT COMMITTEE ON THE MERITS OF STATUTORY INSTRUMENTS TUESDAY 13 MARCH 2007
Present Armstrong of Ilminster, L Jopling, L Eccles, V Maddock, B Filkin, L (Chairman) Thomas of Winchester, B James of Blackheath, L
Examination of Witness Witness: Professor Stephen Crow CB, Chairman of the Casino Advisory Panel, examined.
Q1 Chairman: Good afternoon, Professor Crow. that it took to get it solvent and throughout the My name is Lord Filkin, I am the Chairman of the liquidation. Committee. I will not go into great detail, I suspect you are aware what the role of the Committee is. It is Q4 Chairman: Thank you. Any others? No. Good. essentially a scrutiny committee, it is not there to Professor Crow, we have got quite a bit to cover so if make decisions but to try to ensure that when the a short answer gets to the nub of it by all means feel Lords does debate the instrument itself that the free to make one, just as we will try to be as concise Department has laid that the House is as well as and clear in our questions. informed as we can be in our limited time and Professor Crow: I am obliged, my Lord. processes. Professor Crow: Thank you, my Lord Chairman. Q5 Chairman: The terms of reference referred to geographical distribution of the 17 casinos to be Q2 Chairman: As you are probably also aware we recommended and the Government in its policy published a call for evidence because we thought it statement went slightly further than that and talked was important that we gave those who might have about a “good” geographical distribution, did it not? views or information the chance to oVer those to the Professor Crow: Yes. Committee. We published that call for evidence on 5 March which gave the respondents a very short Q6 Chairman: Looking at the map on page 10 of the period of time but we were pleased that so many panel’s report it seems to show clusters, for example nevertheless managed to respond in that time period. Luton and Milton Keynes together, Solihull and I believe you have had a copy of that evidence. Wolverhampton not too far distant, and also some Professor Crow: I have, my Lord, thank you. gaps, like the north-west coast or the south-west peninsula. Have you got any comments you want to make on that and whether you felt that Q3 Chairman: We are unfortunately going to have recommendation met that term of reference? to focus our scrutiny because we have got limited Professor Crow: We do, of course, my Lord time. Essentially we are focusing on the decision Chairman. The criterion about geographical spread around the regional casino, but we may stray a bit was only one of the criteria and in particular we had wider than that, as may you in your answers if you to balance it against a spread of types of areas—we wish to, so do not feel fettered by us in that respect. distinguished nine actually—industrial towns, large Does that feel comprehensible? cities, seaside resorts and so on, I will not go through Professor Crow: Yes, thank you, my Lord. them all. If we look, for example, at Luton and Chairman: Excellent. Before we then start could I ask Milton Keynes, which undoubtedly are close any Members of the Committee who feel they have together, as everybody here knows Milton Keynes is got a declarable interest if they would wish now to beginning to get old new town whereas Luton is an declare it? industrial town with problems of factory closure, so Lord James of Blackheath: I shall certainly start by we had these two diVerent types. One can also saying that I was chairman of the New Millennium distinguish between Solihull and Wolverhampton. I Experience Company throughout the last four should just mention, of course, that we do have one operational months of the Dome and for the year in the south-west peninsula, we proposed a casino in 3638711001 Page Type [E] 19-03-07 21:38:50 Pag Table: LOENEW PPSysB Unit: PAG1
2 draft gambling (geographical distribution of casino premises licences) order 2007: evidence
13 March 2007 Professor Stephen Crow CB
Torbay. I should also mention that we do have at him. He says of your committee that your least one casino in every English region and also in conclusions: “appear to be often arbitrary, highly Wales and Scotland. disputable and based on reasoning which was frequently inconsistent, superficial and ill-informed”. Q7 Lord Jopling: I wonder if I could ask you about Perhaps you would answer that when I have asked the meaning of “social impact”. Your terms of the second half. This man, who I hear the warmest reference said that social impact was the primary things of, has claimed that international academic consideration yet you seemed to be giving in some research is “unanimous that destination resort cases more emphasis to things like regeneration or communities . . . are more likely to bring greater willingness to license or range of types of area or benefits with less costs to local communities than are geographic area. You seem to have got into all of urban casinos whose customers come mostly from these things. A number of suggestions have been within the jurisdiction”. Would you like to answer made to us that you seemed to have lost the those two questions? importance regarding social impact as the primary Professor Crow: Well, my Lord, I think it is fair to say consideration. that in academic life nothing is ever unanimous and Professor Crow: Well, my Lord, I do hope we have against Professor Collins one would also mention not. Of course, the primary consideration was that we other academics who take a diVerent view. Our should set up a good test of social impact, which of research that we made available in the field showed necessity brought in considerations of social impact. that actually opinions on the subject were very By “social impact” we interpreted the term widely to polarised and a lot depends on, as it were, which mean not just adverse eVects, problem gambling and stable a particular academic comes from. so on, on which we had a lot of evidence and we were very well aware, but also the beneficial eVects that Q10 Lord Jopling: Just on that point, do you think would have social impact like the creation of jobs and with retrospect that the Secretary of State might have improvement to the economy, bringing money into a done better to have had a panel which was less local economy and so on. slanted to regional development, for what that is worth, rather than a deeper knowledge of gambling Q8 Lord Jopling: Moving on, let me move to another and social aVairs? issue. The Joint Committee on the draft Bill said that Professor Crow: I do not think so, my Lord. It must be they believed that regional casinos should not be appreciated that the panel is an expert panel with a located in close proximity to residential properties. very wide range of expertise ranging from hands-on You seem to have ignored that and moved in entirely experience in the casino industry and the leisure the opposite direction. Can you explain why? industry, hands-on experience in regeneration, in Professor Crow: With respect, my Lord, I do not social matters, in local government, as well as myself believe we have. We were aware of that consideration who I think for these purposes I might regard myself both from the scrutiny committee and, of course, as a strategic planner. Of necessity we took decisions, from other sources. In selecting Manchester, and or came to conclusions I should say, which were indeed New East Manchester, we recognised that based using our expertise to judge the evidence. East Manchester is a very large area, it is not just Lord Jopling: Would you like to come to the second residential, it includes central area activities, the part because I interrupted you before you got there? sports city, and we satisfied ourselves that within that area it would be quite possible to select a site that Q11 Chairman: Lord Jopling, would you just mind V would not su er from this particular problem of if I pressed on that point for one second because I ambient gambling. I think we applied this think it is pivotal to much of the disputation around consideration throughout all our consideration of the the panel’s recommendations and the Government’s regional casinos. In Blackpool, for example, if a site decision. Your own researcher, Karen Lee, who I were to be selected that was actually in the town believe carried out research on the locations of centre that was next to the worst, most deprived casinos, essentially advised that there was a strong residential area in Blackpool. Yes, we did consider consensus of opinion that, to minimise problem this very deeply. gambling, casinos should be located away from areas where children and teenagers frequent and, put in Q9 Lord Jopling: Let me go on with that theme. Let more simple terms, that destination casinos, which I me come to the suggestions which Professor Collins understand to mean somewhere where people have to has made to us. I may say I do not know Professor make a purposive, significant journey to go rather Collins, I had never heard of him until this last week, than just to walk around the corner and pop into, are but I am told by people who were on the Joint more likely to minimise the harmful eVects and, Committee that he is a hugely impressive expert on therefore, to have a net benefit or less harm. Your gambling. Let me ask you two questions really about own researcher, as well as the Professor who Lord 3638711001 Page Type [O] 19-03-07 21:38:50 Pag Table: LOENEW PPSysB Unit: PAG1
draft gambling (geographical distribution of casino premises licences) order 2007: evidence 3
13 March 2007 Professor Stephen Crow CB
Jopling referred to, seems to be saying exactly the Professor Crow: There are a number of things here same thing, that you will minimise harmful eVects by which we looked at. One was we asked all the destination casinos rather than putting them in the authorities if they had a good database. middle of significant urban areas. Are they wrong? Professor Crow: No, and I am sorry if I have given the Q14 Viscount Eccles: Could I just ask— wrong impression there. Undoubtedly it must be that Professor Crow: Perhaps I misunderstood the casinos are best located where people cannot, as it question. were, walk out of their front doors and into a casino, particularly if they have a tendency to problem gambling, or perhaps go shopping and walk into one. Q15 Viscount Eccles: I just want to ask about these Destination in that sense is undoubtedly important. authorities because you referred to them before. I It is important that people must make a clear suppose the parliamentary question is why should we intention to go to the casino and not just accidentally trust them, these authorities? They write books, they find themselves in one. That is very, very important, write articles. I do not deny that for one moment. When we are Professor Crow: I am sorry, I am referring to local talking about destination, we do not necessarily authorities. We asked the local authorities who were mean a holiday resort. If I could just mention putting proposals if they had data that could be used Manchester, it is the third most popular tourist as a database to form the baseline data for any destination in Britain and, as I said before, in New research. As we have learned since we wrote the East Manchester I have no doubt that it is such a report the Government is actually engaging a large area that a site could be found where ambient researcher from Lancaster University to do the gambling would not be a problem. research but we did not know that at the time, of course. Then one needs to be able to trace the Q12 Chairman: Of course, I am no expert on this but customers of the casinos and this is going to be very Y what I would have assumed destination casino meant di cult whatever happens. One also needs to be able V V was one where a comparatively high proportion of to distinguish the e ects of the casino from the e ects the population had to make a relatively significant of all the other busyness, as we have called it, that is journey. I am guessing, for example, that more than going on in the town or city at the time. 50 per cent of its trade had to travel at least an hour to get there. By definition, a central city location in a Q16 Viscount Eccles: Presumably if it is Manchester large conurbation is going to attract a very high there will be people coming from far away who would proportion of its trade from within a relatively short prefer that their wives did not know that they made a travelling distance and that starts, I think, to move journey to Manchester. into the risk area that we understand the Professor Crow: Undoubtedly. international evidence has put before us. Professor Crow: My Lord Chairman, I understand the point. The crucial thing, as I understand all the Q17 Viscount Eccles: Can I just persist a little bit. In research, is that people should make a definite your terms of reference and your discussions on the decision that they are going into the casino and that setting up of your committee, do you believe that you they should not, as it were, because they have perhaps got to some definition of regeneration on which you a particular problem, a particular inclination, just could rely as a kind of tool for now and the future? find themselves in one. Professor Crow: Yes. If I may put it this way in a Chairman: Thank you. Lord Jopling. neologism, the holistic view of regeneration. In other Lord Jopling: I think you have put the second part of words, we are talking about the whole range of my question rather better than I did. regeneration from redevelopment of property Chairman: I am sorry. We are going to turn to through to regeneration of the economy, more jobs, Viscount Eccles. better jobs, social regeneration, social cohesion, improvement of shopping areas and so on. It is an extremely wide area. That is not a definition, I know, Q13 Viscount Eccles: Professor, you referred to but that was what we were looking for. social impact and you attached job creation to the description. We have heard a certain amount of discussion about the diVerences between academics, Q18 Viscount Eccles: Just pursuing the same subject probably on matters like social impact and a bit further, I think you referred to the diYculty of regeneration. How far do you think you are comparing one applicant’s job creation proposals satisfactorily into the subject in the sense that it will with another. Would it be right to say that, for be possible to measure what has actually happened example, whilst you think that you will be able to do when we get down the road, whatever the final ex-post evaluation, nevertheless some of the bidders decision is? are in a less certain circumstance? 3638711001 Page Type [E] 19-03-07 21:38:50 Pag Table: LOENEW PPSysB Unit: PAG1
4 draft gambling (geographical distribution of casino premises licences) order 2007: evidence
13 March 2007 Professor Stephen Crow CB
Professor Crow: I think as far as job creation is Q21 Viscount Eccles: Am I correct in thinking that concerned that is perhaps one of the easier parts of you would prefer to go for a more precise and the evaluation exercise because one knows how many narrower definition, for example, of job creation, jobs there are in a particular establishment and if that is the number of people who are going to be there is a new hotel built along with it then the employed, and consultants tended to throw all the number of jobs in the hotel. Finding out some of the multiplier eVects at you and left you to judge whether multiplier eVects, displacement eVects and leakages you should put reliance on them or not? will be much more diYcult and clearly the researchers Professor Crow: Some of the multiplier eVects were will have to take professional advice from economists just farfetched, sort of five times the number of on that subject. people employed in a casino which clearly would not support it. One is normally talking about multiplier V Q19 Viscount Eccles: I think you visited Germany. e ects of 1.2 or 1.3, seldom more than two. Of course, Do you think there are things to be learnt from there when we come to multiplier eVects it is the case that and their experience which might throw light on size matters. If I can just illustrate this: a casino in a these matters? village would obviously have to go outside for every Professor Crow: I certainly did. I went there because I one of its services and pretty well all of its jobs was assisting with a university field trip that was whereas a casino in a big city is more likely to bring looking at regeneration in the Ruhrgebiet. We were in people and services from that city. staying at Dortmund so, of course, we had to look at the casino. The casino there, I must say, was said by the local people to have had no regeneration eVect Q22 Viscount Eccles: One very short last one. In whatsoever. Thanks to one of the academics at some questions on regeneration there is a final phrase Dortmund University I secured an interview with one which says “set in train spontaneous growth that will of the directors and obtained a lot of information, continually revitalise the local economy”. Is that including the number of jobs there, which was just aspirational rather than your belief as to what you 500. This led me to ask throughout why were most of are looking for? the authorities talking about thousands of jobs and Professor Crow: That is what we call the gold why were they talking about regeneration. The standard. Yes, it is aspirational. We looked to see to answers led on from there. I have been asked to give what extent each of the proposals before us would short answers, I am afraid. lead to that highly desirable situation.
Q20 Chairman: Not to the limitation of what you want to say. Q23 Chairman: Thank you. If I could just pursue a Professor Crow: I am sorry. On the question of jobs, couple of lines on that. As you say, you were charged for example, we were never in a position to be able to by the Government with the best possible test of say that a casino in a particular location would give social impact as your primary requirement and in rise to a certain number of jobs, but what we were your evaluation you said that some locations made it able to see was all the proposals were talking about easier to test that impact than others. If I recollect, the supply side. In other words, they, or the you thought, for example, that it was easier to test the consultants acting for them or casino firms, had social impact in Manchester than it would be for looked around Australia, South Africa, the United Blackpool because Blackpool’s population going to States, and said, “Here is a casino, it is a very large the casino would come from a wider area. Do I do one, it will fulfil our criteria for a regional casino. It you justice in that? has an hotel, or two hotels associated with it, it has Professor Crow: Yes. brought along a conference centre and it has so many thousand jobs”. They have said, “We have imported that and put it in our city” and said, “Lo, so many Q24 Chairman: Taking that then, (a) why do you thousand jobs”. Of course, the commercial world think it made it more diYcult and (b) if you are right does not work like that at all. The commercial world that it made it more diYcult, does that not mean that works on the basis of how many customers you are in practice you tended to knock out any going to have and where they are going to come from consideration of a destination casino on that ground? and so on. We had to look at things like what is the Professor Crow: If by “destination casino” we mean size of the catchment area, what is the tourist profile one where most of the customers come from a long of the catchment area, and make a comparative distance— assessment—it could only be comparative, you could only say that some places would be better than others in this regard, we could not say whether the numbers Q25 Chairman: Or a longer distance. were right or wrong—as between the places. Professor Crow: Yes. 3638711001 Page Type [O] 19-03-07 21:38:50 Pag Table: LOENEW PPSysB Unit: PAG1
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13 March 2007 Professor Stephen Crow CB
Q26 Chairman: Yes is the answer? Professor Crow: No, my Lord. Professor Crow: Yes. Q34 Lord Jopling: Explain why, because you just Q27 Chairman: So your interpretation of the said a few moments ago— meaning of the terms of reference that you were given Professor Crow: What I am saying now are the was eVectively that the best possible test for conclusions that we came to after looking at a lot of methodological reasons made it virtually impossible evidence. Had we thought that, we would never have for you to recommend to the Government that there put Blackpool in the short-list. When we looked at should be a destination casino? the evidence it gradually emerged in that Professor Crow: Yes. consideration that Manchester stood out.
Q28 Chairman: Thank you. You were asked by the Q35 Baroness Maddock: One of the criteria, terms of reference to include areas in need of Professor Crow, was that you wanted to ensure that regeneration and you do a proper job of trying to those areas selected were willing to license a new assess the degree of regeneration and virtually all casino and, therefore, you were very interested in areas need some regeneration, but all areas are not local opinion, opinion across the council and so on, equal in the impact that a significant investment will because when you are trying to get a planning make on them. application through obviously these things are rather Professor Crow: Indeed, my Lord, yes. important. In paragraph 106 you say that you wanted to see how much consultation there had been locally, Q29 Chairman: So you have got two variables there. how much local people had been involved in that, but Of the seven short-listed regional casino applicants, you were rather disappointed at the patchiness across which regional casino do you think would make the authorities in the way they had consulted. I wonder greatest impact? what sort of supporting evidence you had hoped to Professor Crow: Well, Manchester. see. Professor Crow: We hoped to see that in putting Q30 Chairman: Why? forward their proposals local authorities were Professor Crow: Two reasons. First of all, because it reasonably sure that the public, whom they represent, would be fairly central to a very large catchment area, would support them. We discovered, somewhat to the second only to London, it would bring in the our irritation, that at the very last minute the London greatest amount of trade and, therefore, all things Borough of Brent pulled out after a local election. being equal, management and so on, it would be the Plainly that sort of thing benefits nobody. We wanted most successful. to make sure that in putting the proposal forward they did have local support and at some future time, Q31 Chairman: I am slightly struggling with that. or even shortly, there would not be a resolution under Put to one side whether there would be a great section 166 of the Act saying, “We don’t want these diVerence in the regenerative power of a super casino things”. and assume for the sake of argument that it might have a net regenerative eVect of a couple of hundred Q36 Baroness Maddock: So this would obviously million per annum, it seems to me almost self-evident have been important when you were assessing that £200 million in a small area, which might be a whether you would accept an authority’s proposal? destination casino, would have a greater regenerative Professor Crow: Indeed it was. eVect than it would do in a conurbation of over a million population. Q37 Lord James of Blackheath: Apart from the Professor Crow: It depends whether we are talking criteria that we have been discussing, what other about proportions or totals. criteria emerged as worthy of examination as you went along and which were particular perhaps to the Q32 Chairman: I was talking about proportions. In area of Manchester, to give a better insight? other words, which would have the greater eVect on Professor Crow: I think all of them were judged by the the regeneration of that economy and that society? same criteria, namely a good test of social impact, Professor Crow: Plainly, on that basis, the smaller the regeneration need, regeneration benefit and town, the greater proportionally would be the eVect. willingness to license as laid down to us by the Secretary of State. Q33 Lord Jopling: The implication that I get from the answer which you have just given to the Q38 Lord James of Blackheath: Could you look at Chairman is when you compared, let us say, paragraph 171 on page 51 of your report, please. Manchester and Blackpool, you discarded Blackpool There are two comments in there which have caused before you started. me some concern and I would like you to explain to 3638711001 Page Type [E] 19-03-07 21:38:50 Pag Table: LOENEW PPSysB Unit: PAG1
6 draft gambling (geographical distribution of casino premises licences) order 2007: evidence
13 March 2007 Professor Stephen Crow CB us why they did not cause you particular concern. Chairman: Lord James, we should probably put The first of them was that 20 per cent of Manchester’s questions to the Minister about terms of reference residents are currently in receipt of Income Support, rather than to Professor Crow. twice the national average, and later in the same paragraph, “Unemployment stood at 3.9 per cent in Q42 Lord James of Blackheath: The question is what October 2006 against the national average of 2.5 per extra things they did examine. I am just trying to ask cent”. I had some prior experience of Barrow-in- whether they did and, if not, the next question would Furness some years ago with a very similar set of be why not? characteristics and they threw up a very significant Professor Crow: I think it is fair to say that every single anomaly with regard to gambling patterns. There is one of our short-listed candidates have areas that no casino in Barrow-in-Furness but there is an awful meet your description but not to the same degree. The lot of bingo and bingo can be just as damaging, highest degree of multiple deprivation of all the although it is much cheaper, if it is done in regular candidates was Manchester, who were third, and quantities by people on very low incomes. Blackpool, for example, were twenty-sixth, if I Professor Crow: So I understand, my Lord. remember rightly. Nevertheless, they all have areas where there is this serious problem and when it comes Q39 Lord James of Blackheath: The characteristic to the detailed siting, which was not part of our appears to be that the worse oV somebody is in an consideration, people will have to look both as a area with an unemployment level like this, the more town planning and a licensing matter at minimising they are inclined to go towards low end gambling. I this particular issue, and it will not be easy, I know. wondered whether you looked at any such criterion as to how far low end gambling would be available Q43 Lord James of Blackheath: Did you canvass the within this which would become an added and opinion of the local authorities at all on any of these seriously sociologically damaging temptation to aspects and what did they say on the subject? people with those problems. Professor Crow: Yes, we did. We canvassed the Professor Crow: I think the short answer to your opinion, for example, of the former Department for question, my Lord, must be no. We were looking at the Environment’s Planning Policy Guidance which the criteria that were given to us by the Secretary of says that preferably casinos should be in town centres State. I am certainly aware, as I am sure were all of and we got a great number of replies. If I could the panellists, of that particular problem of what you summarise them all in one go, they said, “This will be call low end gambling but, of course, we were looking a town centre, even if it is not the obvious one, and we at casino gambling and the particular problems of will look after this when it comes to the details”. casino gambling. It was brought to our attention that people who are in desperate financial trouble may look at the jackpots available and imagine a quick Q44 Lord James of Blackheath: Given that this is not way out. a destination casino, what view did you take in assessing other criteria on its accessibility and the extent to which people could use it as a destination Q40 Lord James of Blackheath: Which is exactly casino coming from within the wider hinterland? why low end gambling is such a dangerous thing in Professor Crow: As I think I have mentioned, these communities. Manchester is one of the country’s leading tourist Professor Crow: Yes. The answer one would draw destinations. It is not a holiday resort in the from that consideration alone is that you do not put conventional sense obviously but it should not be casinos in places that are in need of regeneration. thought that to be a destination you have to be a seaside resort. Q41 Lord James of Blackheath: You put them in destination locations. Q45 Chairman: I agree with you that one would not Professor Crow: Well, you put them in places where see that a destination casino had to be in a seaside people are well-to-do and can aVord to lose money. I resort, but I thought we had established it was think this is all very hypothetical because, of course, something about the proportion of its trade that was this was not what we were asked to do. likely to have to travel a significant distance to it Lord James of Blackheath: No, I know, but it is what compared to other locations. the figures tell us and that is the concern. You have Professor Crow: Yes. here a situation where there is statistical evidence that this is a community with certain aspects of sociological distress and you are putting into the Q46 Chairman: On that definition, which I thought midst of it an enormous honey pot for anybody with we had established with you, Manchester is not a a particular problem. destination casino location. 3638711001 Page Type [O] 19-03-07 21:38:50 Pag Table: LOENEW PPSysB Unit: PAG1
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13 March 2007 Professor Stephen Crow CB
Professor Crow: I would say so, yes. Professor Crow: We did take into account what the North-West Regional Assembly said. They said they Q47 Chairman: You would agree with me? wanted the regional casinos in three places: Professor Crow: Yes. Liverpool, Manchester and Blackpool. Of those three they would prefer it to go to Blackpool because V Q48 Lord James of Blackheath: At the end of the day there they perceived the regeneration e ects would be what then was the outstanding characteristic that greater. We did go along with them insofar as we guided you to Manchester? chose one of the three that they had set up. They were Professor Crow: Its need for regeneration as expressed quite clear that they wanted one in Manchester after in the terms of our criteria and the comparative Blackpool, but Manchester nevertheless. likelihood of that regeneration taking place, both in terms of what is likely on the ground, the success of the casino and so on, what the local authority would Q51 Chairman: I think it is clear from what you have be able to extract from them through the judicious just said and what we have read in your report that use of Schedule 9 of the Act and, indeed, you were impressed with the way that Manchester Manchester’s track record in tackling problems of eVectively presented their capacity to manage the deprivation in that particular area, for example the presence of a casino in their midst and to manage any way they used the Commonwealth Games and a consequential social eVects. Am I right in that? particular example they gave us was how a very large Professor Crow: That is correct, my Lord, yes. Asda Wal-Mart store that had been set up managed to attract 90 per cent of its employees from the area. Q52 Chairman: Where is that in your terms of Q49 Chairman: Thank you. Can I just pursue a reference? couple of points on that seam of questioning that Professor Crow: That comes into the social impact Lord James has opened up. The first is you aspects and into the regeneration. mentioned in response to his question what impressed you about Manchester, but why was it then at the short-listing stage that Manchester was at the bottom of the seven and yet in the final stage it Q53 Chairman: Does it, because I thought the test, came top, it made an Olympic standard leap, did it which some of us were surprised by, was the not, up the ranking? Was that because the evidence Government did not ask you to identify locations V changed or your understanding of it changed, or that would minimise the harmful social e ects, which what? is what most of us would have thought they would Professor Crow: Both, I think. May I say, first of all, have asked you, they asked you to ignore that and that the ranking that we used in producing a short-list identify places where you could best test what were V was not intended to find the winner. We did that the e ects and you seemed to be hopping from one leg particular marking exercise because it was necessary to the other. You cannot logically have both to find a discipline to bring together the various positions, can you? opinions we had got at that time on 67 candidates. Professor Crow: With respect, my Lord, I do not think We certainly did not intend to find the winner at that we are doing that. Plainly we were concerned that our stage. What we did want to do was to make sure we terms of reference had to include social impact, both had the winner in our short-list and we did that positive and negative, and, although that was not exercise for that purpose and that purpose only. We obvious from it, it was clear that within regeneration used a somewhat diVerent method once we had got there are social aspects, within testing there are social our short-list. It must be remembered that when we aspects and, indeed, within the Act itself there is a did the short-listing we had before us only the requirement to look at the social aspects. I think that proosals of the authorities; thereafter we had a lot of we were justified, as it were, in interpolating this evidence both from the authorities and, indeed, from consideration throughout our first two major people in the area who were opposed to the local criteria. proposal, and that came out not least at the examinations in public which we devised for the express purpose of drawing out public opinion in the Q54 Chairman: I think you were right to think that places as well as the opinion of the local authorities. potentially you had to use judgment in looking at those aspects, on the argument you have made, but I Q50 Baroness Thomas of Winchester: I was cannot see where you were invited to make a concerned that you had not taken into account what judgment about the capacity of the local authority the North-West Regional Assembly thought and I itself or necessarily whether the panel had greater wondered why not. expertise in making such a judgment. 3638711001 Page Type [E] 19-03-07 21:38:51 Pag Table: LOENEW PPSysB Unit: PAG1
8 draft gambling (geographical distribution of casino premises licences) order 2007: evidence
13 March 2007 Professor Stephen Crow CB
Professor Crow: Could I answer the first part and then decided we could pay little weight to a consideration the second. As far as the first is concerned, the like that. delivery of regeneration in the broad holistic sense that I mentioned will to a very large extent depend Q57 Baroness Thomas of Winchester: Professor upon the actions of the local authority and the way it Crow, I wondered how far were your decisions based sets about it, because as we saw from Dortmund there on the original applications and how much on was none, and there are examples all over the world independent validation or the research? where there have been even larger casinos than in our Professor Crow: It was not so much on research Act where there has been little or no regeneration. because we had the original applications, we asked Clearly the authority has got to be very active in for additional information where we wanted it, we making sure that the regeneration eVects happen. had the views of the public and opponents to take One of the mechanisms of that is through the prudent into account and, of course, we had oral evidence at use of Schedule 9 and it was there that we were the examinations in public. Just as an administrative looking for the capability of authorities in that activity we had to put all of that together, we had to activity and their track record. weigh it, we had to bring our expertise to bear on it Chairman: I think common sense is with you but I am and come to conclusions. not certain the terms of reference are. Perhaps we will leave that and move on. Q58 Baroness Thomas of Winchester: So you reckon that you did it and, having looked at everything in the Q55 Baroness Maddock: I think it is probably round, one of the original applications did not weigh appropriate under this area of criteria if I raise more heavily than the rest? something which struck me when I heard that Professor Crow: No, we just had to put all the evidence Manchester had been chosen, which was that there is together and see where the strength in it lay. I should a very high level of gun crime in the area. I wondered mention that in Appendix H in our report there are if this issue was raised by anybody during your 31 pages of representations that we received and that deliberations. is just listing the people putting representations in. We had an enormous amount of evidence and the Professor Crow: At every one of our examination panel corporately looked at it all. sessions we had a very senior police oYcer and we asked that police oYcer if they saw any particular crime problems and in each case the answer was, Q59 Baroness Thomas of Winchester: You “No, we will have it under control”. mentioned the examinations in public sessions, which I want to come on to because I think you will agree that there was some criticism about the way that Q56 Lord Armstrong of Ilminster: This is going back these were undertaken. to Manchester a bit. The bids that you received varied Professor Crow: Yes. very much between some relating to a specific site and some to a more general area. Presumably, and you Q60 Baroness Thomas of Winchester: I wonder if I will correct me if I am wrong in making that could just read out a couple of sentences from the assumption, the data that you were able to get were memorandum by Mr Marc Etches who said, I think stronger and more detailed in relation to a specific he went to all of them: “Of significant concern in site rather than a general area. I wondered how you relation to the regional casino licence bids, were the managed to draw comparisons between those which substantial diVerences in the way the seven EiPs were were very dissimilar in this respect. conducted, especially in relation to who was allowed Professor Crow: Undoubtedly, where there was a to speak and when and to what extent delegations specific site chosen the data was obviously more were confined to presenting the case for their own detailed but I would not necessarily say better. location rather than attacking the claims made on Sometimes it acted against them. There was a behalf of other locations”. I just wonder whether you particular problem where local authorities had got thought that the procedure at the examinations in tied up with a particular casino operator because at public sessions was fair to all bidders. that time they had not appreciated what was going to Professor Crow: I must say that examination in public be in the Act. In the end we decided that these is a very well tried instrument in strategic planning. I considerations should carry very little weight. For have had considerable experience in chairing example, at Greenwich there was tremendous examinations in public. I just do not see it in the terms controversy which was in all the newspapers and so that Marc Etches has mentioned. If I can mention a on that the present owners of the Dome had started couple of criticisms that have been made: for building their casino and was this a good thing or not. example, Greenwich were very concerned that they Greenwich said it was and the rest of the world were first and it was quite likely that in the later seemed to be saying it was cheating. In the end we just sessions there would be evidence against them, so I 3638711001 Page Type [O] 19-03-07 21:38:51 Pag Table: LOENEW PPSysB Unit: PAG1
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13 March 2007 Professor Stephen Crow CB was quick to assure them if that happened they Professor Crow: Indeed. should let me know and I would give them a chance to reply; natural justice demands that. They agreed Q66 Chairman: There will be nothing else like that in with me that was a good idea, but they did not. this country and those who get excited and interested Equally, at Blackpool, at the last one, Blackpool in such facilities, I think the evidence is clear, are complained that I allowed some late evidence to be likely to be prepared to travel, within reason, almost put in. I did that on the basis that Blackpool, and to wherever it is. I find it hard to believe that a anyone else for that matter, had the opportunity to regional casino up to the square footage we have reply. Blackpool did actually take up that talked about would not be a roaring success virtually opportunity and it led to an exchange of evidence in anywhere on the mainland of Great Britain. correspondence. They just mentioned the first bit but Secondly, I would have assumed—tell me if I am not the second bit, which I do not think is fair wrong—that a destination casino, and I think we criticism, quite frankly, my Lord. have agreed what that means, is more likely to require overnight accommodation than one in the middle of Q61 Baroness Thomas of Winchester: Could you just a metropolitan area. I would have thought that the say why we have not got the transcripts of the consequential ancillary facilities of overnight proceedings yet? They have not been released, is there accommodation and the other facilities that probably a reason for that? go with that would be greater in a destination casino Professor Crow: Transcripts of? than in a city centre one. Professor Crow: If I could take the second point first, Q62 Baroness Thomas of Winchester: Transcripts of if I may, my Lord. A casino in a major city will not the examinations in public proceedings. only cater for the people in that city, it will also bring Professor Crow: I am sorry, I cannot answer that people in. I am sorry to have to repeat myself but question. Manchester is a very large tourist destination, it brings people in from all over the world, and in our Q63 Chairman: We will put that to the Minister. judgment it is not likely that Blackpool would bring Lord James, I think we have dealt with what was the in so many people from all over the world. next question. You say in your report, and you must be right, that: “the regeneration benefits of a casino Q67 Chairman: I totally agree with the first part of proposal must bear a relationship to its potential your statement, clearly wherever it is you are pulling profitability”. What weight or impact did that people from outside as well as within its own statement have on your assessment of the catchment area. What I am interested in is where is comparative bids? the evidence that the scale of diVerence in terms of the Professor Crow: I think, my Lord Chairman, economic benefits is so significant that that should considerable because we were looking for points of have been a significant decision-making factor, as diVerentiation between one proposal and another you have said quite clearly it was. and that was one of the areas where we felt that there Professor Crow: This is our impression based upon— was considerable diVerence. Q68 Chairman: So it is an impression rather than— Q64 Chairman: Can you explain that? Professor Crow: —based upon the expert opinion of Professor Crow: It is the point I made earlier, if I may, members of the panel. about the diVerence between a casino in a city and a casino in a village. If we have a very flourishing casino Q69 Chairman: Could you just specify which expert that has up to the maximum number of machines, has opinion of the panel would have borne on the very long opening hours, a large number of comparative economic regenerative eVect. customers, then the authority is able to extract more Professor Crow: The comparative regeneration through the use of Schedule 9 as well as the eVects of eVect— the casino being greater. There is a greater probability of a casino in a large place bringing along Q70 Chairman: Profitability, which we are leading an hotel or a bigger hotel or more hotels, bringing into. along a convention centre and other good things for Professor Crow: The commercial expertise, of course, regeneration. comes from Mr Froomberg, who is the Commercial Director of British Waterways and has considerable Q65 Chairman: Thank you. Can I just ask you two experience in the leisure industry. supplementaries which explain why I am struggling with that. For reasons the Government has decided it Q71 Lord Jopling: You talked to us about the is only going to license one regional casino, eVectively problems of profitability in a village, yet in Scotland assuming a massive state-sanctioned monopoly. the one casino you seem to be recommending is in 3638711001 Page Type [E] 19-03-07 21:38:51 Pag Table: LOENEW PPSysB Unit: PAG1
10 draft gambling (geographical distribution of casino premises licences) order 2007: evidence
13 March 2007 Professor Stephen Crow CB
Stranraer, to which I have never been. I do not know Professor Crow: I think it would be the advice I whether it is a village, but it cannot be very large. would give to anybody going into any competition How did you assess the profitability of a casino in which would be to study very much the terms of Stranraer? reference of the determining body and its criteria, Professor Crow: It would only be a small one in and study it very carefully and make sure they were Stranraer, my Lord. We did expect that it would giving good evidence in relation to those topics. probably get some trade from Northern Ireland since it is one of the ferry ports to Northern Ireland, Q74 Baroness Maddock: Would you advise the and, of course, we did choose Stranraer because, if Government to change their criteria at all because I can come back to the very first question my Lord we have had some discussion today about the Chairman asked, we wanted a geographical spread. criteria that you were given as a body and the various things that have come up as you have been Q72 Lord Jopling: But the rest of Scotland has trying to come to a decision? nothing. Professor Crow: I think not, my Lord. We did have Professor Crow: That is so, yes. We had very few the opportunity when we started—I do not know proposals from Scotland. whether we had the opportunity but we certainly thought about it—and thought our criteria were Q73 Baroness Maddock: If at some time in the good for us, they were sound, given, of course, that future the Government decides to increase the we were able to talk about social considerations number of casino licences, particularly regional under two of the other criteria. licences, because we have been talking about that today, is there any advice that you would now give Q75 Chairman: Thank you very much. to future bidders about the content of their Professor Crow: Thank you very much, my Lord. application given the experience you have had in Chairman: Professor Crow, you have been most this round? helpful to us.
Examination of Witness Witness: Rt Hon Richard Caborn, a Member of the House of Commons, Minister of State, Department for Culture, Media and Sport, examined.
Q76 Chairman: Good afternoon, Minister, and reference of the casinos, 17 as it is now, that will be welcome. Maybe you can start by telling us why you licensed over the next period. accepted the Panel’s recommendations. Mr Caborn: First of all, can I just say, my Lord Q77 Lord Armstrong of Ilminster: Minister, the Chairman, I am grateful for the opportunity to at allegation has been made to us that the Secretary of least put on the record some of the reasoning for the State decided to lay the draft Order, which decision that we took. Thank you very much for the Y incorporated the Panel’s recommendations, without questions that your clerk supplied to my o cials, herself considering their merits or inviting further which has made life a little easier, as somebody who submission from the public or interested parties. Is chaired a Select Committee for many years. I would that a fair statement? Did she just adopt the also like to lay to rest some of the myths that have recommendations, lock, stock and barrel without been in the press. It is the first time in the 20 years that thinking about them, and shove them into the Order? I have been in the House that I have actually been Mr Caborn: Not at all. When we received the report, before the Lords for cross-examination. We laid out my Secretary of State had to consult Scotland and the terms of reference, as you know, my Lord Wales as part of the procedure anyway. We had said Chairman, in 2004 because we wanted to make sure, very clearly on many occasions that this would be a knowing that the decisions would be in the public transparent process and one that we would bring domain in a big way, which I think has proved to be back to the House. I think that has to be contrasted the case, that we did have terms of reference that were with the year or more of the press trying to attack compatible with the Bill itself, and I think you know what the Government was doing on this particular the three bases on which the Bill is founded. One is Act. There is no doubt it is one that has been in the the protection of the vulnerable, including children; public domain and some have genuine concerns secondly, it is to keep it crime-free; and thirdly, to about it and that we accept. Therefore, we wanted to make sure that the industry does actually work for make sure that the process was fair and transparent the punter, and he will get a fair bet. It was to make and that at the end of it Parliament would take the sure that we reinforced that and any ill eVects of that final decision. My Secretary of State received the would be able to be monitored by the terms of report, we reflected on that, she immediately reported 3638711001 Page Type [O] 19-03-07 21:38:51 Pag Table: LOENEW PPSysB Unit: PAG1
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13 March 2007 Rt Hon Richard Caborn MP to the House and said that she would be consulting on the regeneration, on the social impact across 17 Scotland and Wales, which we said we would do, and not one. which we are constitutionally bound to do anyway, and then my Secretary of State had representations Q80 Chairman: I do not find that fully persuasive from a number of groups and, based upon that, she because clearly, the Panel’s recommendations were recommended that we would be fully supportive of not based particularly on the eVect of one casino or the report. another. They were clearly looking at the geographical spread. If you did want Parliament to Q78 Chairman: I suppose a rather coarse way of have strong ownership and purchase, you would be putting it would be that, whether or not you agreed supportive of them actually having the facility to do with each and every one of the specific 17 so in the way I have suggested. Mr Caborn: recommendations, it would be more trouble than it No, I think that would be a deviation was worth to disturb the “job lot” eVect which from what I said in Committee, what I said on the successfully outsourced a diYcult decision to the floor of the House and indeed, I think what the Panel. British public expect, and that is to look at the social impact across 17 casinos, agreed against the criteria Mr Caborn: It would, but we did not even that the Panel had before them. We believe that is the contemplate that, my Lord Chairman, because we best way forward and that is why the 17 will be in one looked at the report in detail against the criteria we Order. We believe that is the best way forward and had laid. We thought a very professional job had then, three years after the issuing of the licence, we been done. We believed the skill set of the Panel itself will come back and report on the impact of the 17, was broad enough to bring back a well thought out, not just one. professional report, and, based upon our consultations with Scotland and Wales and with those who wanted to make representation, we Q81 Lord Armstrong of Ilminster: You set the believed that the right decision was taken. It was in criteria for the Panel’s work and obviously, that set that context that we have recommended to the their direction and the way they were going to House, and indeed, the debate will be taking place in approach their task. I wondered why you had chosen the next few weeks, and I can assure you that that will the four particular criteria you did give them, the be not a one-and-a-half-hour debate but a three-hour geographical spread, the social impact, areas in need debate so that people who have concerns and want to of regeneration and willingness to license, and why put a position to the House will get the opportunity the criteria that you gave to the Panel did not include to do that. the licensing objectives which are set in the Act, the three which you yourself have just referred to. Mr Caborn: I think, to a large extent, they are implicit Q79 Chairman: Thank you, and it was very good to in those terms of reference. We will test the 17 hear you say so clearly that it was down to Parliament locations now to look at what the impact will be on to decide. Presumably, therefore, you would be social regeneration and whether we believe they have perfectly supportive, if Parliament so wished that, popular support anyway, because that was already rather than having a “job lot” Order, they required part of the Panel’s approach, to make sure that they the Government to bring forward separate Orders had consulted, and I presume Professor Crow has that allowed them to diVerentiate, for example, outlined that to you. We believe two of those criteria between regional casinos, large ones and small ones will be tested very clearly with the assessment of the and make decisions on the best ones of each of those. 17 casinos over that three-year period. Mr Caborn: The answer to that is no. If you go back to the terms of reference and the approach we had, Q82 Chairman: Can I press you on that slightly? I this is not a one-oV of small, large or medium. We set think it was clear from what Professor Crow said, or oV with 24 casinos and when the terms of reference at least in the discussion we had with him, that he was were drafted for the Panel, there were possibly going charged with a decision about how best to test the to be 24. As you know, there was a particular political social impact. It was not a responsibility to seek to action taken that reduced that from 24 to 17. This is minimise the adverse social impact, and that not just about one casino; it is about 17 casinos, surprised us because, clearly, central to the Act was which is part of the testing of the terms of reference the protection of vulnerable people and the across the country. So whilst I think many people prevention of gambling being a source of crime or have homed in on the one casino, this is not about disorder. He was not charged by his terms of one; it is about 17 casinos and we will be testing the reference to look at that; he was charged to be able to social impact of 17. Therefore to single one out would assess whether it had had an eVect or not. Why did be wrong and the Panel have approached it, in terms you do that? Why did you not want to seek to of the terms of reference, on the geographical spread, minimise the potential harmful eVects of the casino in 3638711001 Page Type [E] 19-03-07 21:38:51 Pag Table: LOENEW PPSysB Unit: PAG1
12 draft gambling (geographical distribution of casino premises licences) order 2007: evidence
13 March 2007 Rt Hon Richard Caborn MP terms of the decisions on or the recommendations on consideration by looking at some of the other matters their locations? that Lord Armstrong referred to, like willingness to Mr Caborn: We have. The Panel itself is not the sole license, range and type of area and geographic area. action in reducing this. We have set up a Gambling It seems that in several ways, including law and order, Commission, which has wide-ranging powers, and they went beyond the primary consideration which when the 17 casinos have to go through licensing, you had set them. then they will be subjected to one of the toughest Mr Caborn: Can I go back to the basis of the Panel criteria in terms of gambling probably anywhere in itself? We had a statement of national policy on the world against the three criteria we have laid casinos. That was out for discussion in December of down, and that is where the action will be taken to 2004. We went from the whole of the Committee make sure that the social impact is minimised. What against the criteria, we set a statement on national Crow and his colleagues had to do was to make policy on casinos, and nobody questioned, in both certain assessments against the criteria that we had Houses of Parliament, that national statement, which laid down. It would be wrong to say that Crow was we used as the main blueprint for taking forward the there as the only instrument in reducing social advisory panel on new casinos, their location and its impact. terms of reference. That went through both Houses. It was never questioned by anybody, and indeed, has Q83 Chairman: No, but he was explicit to us, as we been the basis of how we have moved forward, in thought from reading his report, that he had marked terms of the terms of reference, the composition and down heavily one bidder, Blackpool, because it the timetable. I come today to now say what is social V would be more diYcult to assess the social impact, impact? Obviously, in crude terms, it is the e ect in the social eVects, whereas it would be easier to make terms of problem gambling, and that is an area where that assessment for Manchester, yet that sat against we are extremely keen to make sure we continue to what we have been told by the international research, get the type of benefits we have had out of the 1968 that a destination casino is likely to have less social Act, which we believe kept the impact down to an impact than a city centre one. Those two objectives of absolute minimum compared to any international the assessment of social eVect and the minimisation standards. That was obviously the main criterion. were explicitly in tension in his mind and that steered There are other impacts, as you rightly say, on their decision rather than minimisation of socially regeneration and again, that is exactly why we have harmful eVect. set up these pilot projects, to see how we can measure V Mr Caborn: That is a decision the Panel made and the e ects both in terms of social impact and obviously, you have cross-questioned and it may be economic regeneration. That is why they are pilots. something you will draw out in your report. As far as That is why we have 17, and we will make a we are concerned, the Secretary of State and myself, judgement. I do not know what overall the economic we are reasonably content that a thorough job was impact will be on this but I will tell you in about three done across the three terms of reference, or the four years’ time, when I come back and we have made our terms of reference, if you are looking at the assessment. That is why we are doing the pilots. We consultation part. We are content on that. I am also are taking a very cautious approach to this. I and my reassured in terms of the wider picture that, in terms Secretary of State visited many countries to see the of social impact, we have given a regulating authority problems that had ensued from unfettered the powers to be able to move in if things start to drift development of gambling in a number of countries. in the wrong direction. We have gone the reverse to that. This is a very cautious approach, one that will be evaluated everywhere now, with a very strong regulatory body Q84 Lord Jopling: It does seem strange that you did to oversee the whole process. If we get economic not put those three items in the terms of reference. I regeneration, that is fine but we will make sure that am thinking particularly of the first one, which says we actually keep any social impact to a minimum. it is to prevent gambling from being a source of crime and disorder, whereas the professor told us that in fact they had done that, although you had left it out, Q85 Lord Jopling: I wonder if you could give us your and you should not have done, because they comments about the structure of the Panel itself, interviewed police in all the places. Let us leave that particularly the various professional backgrounds. aside. Can I ask you why it was that you set “best Looking particularly at Professor Collins, who was possible test of social impact” as the primary regarded very highly by the Joint Committee which consideration. Perhaps you could tell us what you looked at the draft Bill, he is saying he has admitted meant by “best possible test of social impact” and, to a mild interest in the success of Manchester. He whilst you are at it, tell us what you mean by talks about the Panel, and I read it to you. He says, “regeneration”. It seems that one could interpret it “The CAP’s conclusions, though they certainly that the Panel turned upside down the primary exhibit great independence and impartiality, 3638711001 Page Type [O] 19-03-07 21:38:51 Pag Table: LOENEW PPSysB Unit: PAG1
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13 March 2007 Rt Hon Richard Caborn MP nevertheless appear to be often arbitrary, highly Mr Caborn: I must admit that never crossed my mind disputable and based on reasoning which is when we set up the Panel. That is a truthful frequently inconsistent, superficial and ill informed.” admission. I am not going to duck it. It is something Do you not think that, with hindsight, it would have that did not cross my mind. I never thought I would been better to have chosen a diVerent Panel, with be having to defend the terms of reference or the wider professional backgrounds, particularly with composition of the committee at a later stage but regard to gambling and social matters? obviously, I am, and I am going to do it in a few Mr Caborn: I think the answer to that is no, and I will weeks’ time in front of the House as well. I gave you say why. You have had 117 pages of written an honest answer: it did not cross my mind and for information before you, and I have gone through that I stand guilty. those. I think, broadly speaking, those who the decisions were made in favour of, the 17, said it was Q88 Lord Jopling: Just to finish that part of the very fair, transparent and objective. Those that did discussion, here is a man who admits an interest in the not win think it is the worst thing that has ever success of Manchester, who says, “The Panel could happened. The reality of life is that when you set a not be expected to possess the complex and detailed Panel up, you are dammed if you do and you are knowledge of how the casino business works or under dammed if you do not. So we set up a Panel and made what circumstances, including those relating to it very clear that it would be independent. I believe location, casinos can be regulated so as to minimise Y the skill set that they had was su cient to make the social costs and maximise public benefits.” Let me judgements that they did. I believe they have done a move on to the next question. As you cannot professional job and I think the 117 pages of evidence compare data when there is only one licence, why did that you have had submitted to you, if you read it all you not change the original criteria, which might in the round, broadly speaking, comes out as saying have been appropriate, when the Bill was changed to they have not done a bad job at all. have only one regional casino licence? Mr Caborn: Because we are testing 17. It is not about just regional casinos. This is about small, large and Q86 Chairman: I do not think that is a charge that regional casinos. There are 17 casinos which will have can be stuck on Professor Peter Collins because it is licences in this round. The fact that the regional pretty clear that he is not parti pris. It is pretty clear casinos went from eight to one we do not believe also that he is probably the most authoritative changed either the statement that had been made in academic expert on gambling, casinos and their terms of casino policy or indeed what we are trying to social and economic eVects. He is pretty critical of achieve, and that is to test the eVects of 17 casinos in some of the processes and is particularly critical, I this country. That is the object of the exercise. Had it think, of what he feels is the way in which the Panel been 24, the same principle would still apply. It would either ignored or did not understand the evidence have been better had we had the eight regional ones, about destination casinos being on balance better in our opinion. That was politically not doable but we locations than city centre locations. had to make a decision because, as I think, my Lord Mr Caborn: Obviously, that is Professor Collins’ Chairman, you recognize and know, we wanted the view. Everybody is entitled to a view. I, as a Minister, Act put on to the statute book because casinos was have to take a view as well. I believe that the process but a small part of the Act itself; the Gambling that we put in place and I think the skill set of the Commission and the need to control internet and people we put on the Panel was wide enough and remote gambling in our view is probably far more deep enough, as you probably found today with important in terms of the protection of the vulnerable Professor Crow, to do a professional job. That is now than casinos, and that is indeed where we wanted the in the public domain. We have consulted since we powers, we did not have the powers as far as the received that report and my Secretary of State and Government was concerned, and indeed Parliament myself have confidence in recommending that in its Y gave us those powers. That was uppermost in our totality to the House to vote in the a rmative. minds. If we had to concede eight to one in terms of regions, then fine, but it did not change the Q87 Baroness Maddock: Minister, I wonder if underlying basis of how we were going to assess 17 anybody has raised with you the fact that there was casinos and not just one. not a woman on the Panel. I say this because one of the things that the Panel were looking at was the Q89 Lord James of Blackheath: Minister, the report social impact, and certainly women and families acknowledges the close aYnity between the often feel the social impact of gambling that gets out regeneration benefits of a casino and its potential of control. I recognize that you were trying to get a profitability. How do you anticipate that the benefits skills base but was it really so diYcult to find a will be channelled to the local advantage rather than woman with some of those skills? left in the pockets of the investors? 3638711001 Page Type [E] 19-03-07 21:38:51 Pag Table: LOENEW PPSysB Unit: PAG1
14 draft gambling (geographical distribution of casino premises licences) order 2007: evidence
13 March 2007 Rt Hon Richard Caborn MP
Mr Caborn: That is, my Lord, very much down to the Q94 Baroness Maddock: Minister, the Order permits negotiations that take place with the local each of the selected authorities to issue a casino authorities. I think you are absolutely right in asking licence but only after they have held an open how you can actually get those benefits. They have competition for the proposals and once the winner three licences to get. They have to get a gambling has obtained planning permission and the licences we licence from the Gambling Commission. Any have just been talking about. There was criticism operator has to be fit and proper. The next one is that from some of the people taking part in the bidding they will be able to extract gain, as with section 106 that some bids actually referred to a preferred bidder, on planning. The third one will be the premises and they felt that that meant you would not have the licence. It is really up to the local authorities to have open, fair competition afterwards, and also, some of a beauty contest, or at least, I would if I were in the the authorities referred to a particular site, and others position of the local authorities, to make sure you get referred to the fact that there was not a particular site. as many as possible to bid for those licences so you There has been some controversy about whether can extract the maximum out of that. We made it Manchester’s is actually going to be on the site that it very clear indeed, and my Secretary of State has says. I wonder if you could deal with those issues. written to the local authorities to remind them of Mr Caborn: I think you can find them in the Act. their duty and obligation under the Act. Paragraph 2 of Schedule 9 of the Act requires the Secretary of State to make regulations that licensing Q90 Lord James of Blackheath: Is there any scope authorities must comply with regulations about for profitability beyond a given level to be channelled inviting competing applications. In particular, those for the benefit of the community as a bonus? regulations must make provisions about the Mr Caborn: That is part of the negotiations. There publication of invitations, including provision as to are some very skilled negotiators in local authorities the manner and timing of publication and the matters and I have no doubt that the opportunities we have to be published and the timing of responses. now given them under the Act in terms of the Paragraph 6 of the Act enables the Secretary of State premises licence—and that is why we brought the to issue a code of practice about the procedures to be premises licence into the Act, because we did not followed by the licensing authorities when making believe section 106 was suYcient to get the benefits both stage one and two determinations. I can assure that were necessary for the community. This gives you that my Secretary of State has written to local them an open cheque to negotiate with those who authorities saying that they have to have those want to operate these licences. competitions and therefore the question of preferred bidders, in my view, does not stand up now. Q91 Lord James of Blackheath: Would that include a commitment as part of the terms under which the Q95 Baroness Maddock: But it did happen in some contract is granted to build, say, a skating rink or of the bids. anything of that sort? Mr Caborn: It happened but I can assure you that Mr Caborn: It can have anything it wants. It can have probably one of the things local authorities did a theatre, a library, a research centre. It can do what wrong, if I may say so, if you read the papers, you it wants. That is open in terms of the premises licence. would have thought there would be a super casino on every street corner at one stage. Every football Q92 Chairman: It struck me that the legislation was ground in the country had got a preferred bidder. phenomenally powerful, deliberately so, and that a V Every local authority had a preferred bidder. There skilful local authority, when they are e ectively were so many preferred bidders running around that licensing a national monopoly, which is what it is, can it was absolutely meaningless at the end of the day. It extract enormous financial benefit, particularly, as was good for the copy in the papers. If we had all of you say, as they do not have to rely on the slightly them, we would have a casino on every street corner shaky ground of section 106. and a million new jobs. Mr Caborn: No, and that is exactly, my Lord, why we did what we did. There could be in all 17, obviously the regional ones more so, great potential for Q96 Baroness Maddock: Can I press you on the investment way beyond the infrastructure of the other point, which is about the site. Some of the bids casino itself. had specific sites. Are the licences going to be restricted to those sites? Q93 Chairman: It would be amazing, in fact, if the Mr Caborn: They are restricted to the local authority aggregate value of that was not in the scores of that made the bid and they will make that judgement millions of pounds to local authorities. themselves as to where to site that, in consultation, Mr Caborn: I do not speculate on things like that, my obviously, with the businesses and the residents in Lord. I will leave that to those who have to negotiate. those areas. That is entirely a matter for the local 3638711001 Page Type [O] 19-03-07 21:38:51 Pag Table: LOENEW PPSysB Unit: PAG1
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13 March 2007 Rt Hon Richard Caborn MP authority. It is the local authority that now has the Mr Caborn: The Act says that the Manchester licence, not a particular site. authority applied for a licence. That is what they have been granted. Indeed, 17 have been granted a licence in their local authority. It is for them to determine. Q97 Baroness Thomas of Winchester: So Baroness Thomas of Winchester: It is a regional one. Manchester might decide that it does not want the How many miles away could it be? site to be in East Manchester? It might want it to be somewhere else in Manchester. Mr Caborn: Absolutely. That is a discussion that the Q103 Chairman: It is within the local authority area. local authority will have. The local authority, if I may It is quite a compact urban area. say so, is very much in the driving seat because they Mr Caborn: Manchester is not a large area. have the land, they have to give planning permission Chairman: It is quite small. and also the applicant has to get a premises licence. So the local authority are in a very strong position to negotiate with those applicants. Q104 Viscount Eccles: Your statement of national policy, to which have already referred, in December 2004, and the matter of consultation: the local Q98 Baroness Thomas of Winchester: So it might authorities, as you have said, have been in a very V make a di erence to some of the other criteria? strong position and it is a kind of a honey-pot Mr Caborn: No, the criteria are judged against that. exercise from their point of view. In paragraph 20 No. Crow and his colleagues knew exactly the criteria there is a quite weak sentence about consultation, that were laid down. They were laid down in the Act which simply says “the local authority may wish” to that it was the local authority that has the licence, not provide an opportunity for consultation with local a particular site. people. I wondered what the experience of consultation had been. Is the Department following Q99 Chairman: That being so, the Panel must have it? What conclusions, if any, has the Department been in error when they took into consideration the drawn? The matter of consultation is rather a diYcult benefits of a particular location in Manchester when one and, if it is not insisted upon and if the local coming to their conclusion. authority has invested a lot of money, it might be a Mr Caborn: I do not think so. I do not agree. They formality rather than a real process. knew exactly what the Act said in terms of what they Mr Caborn: First of all, they had to be reassured that were siting. Once they sited the local authority—and there was a consensus of support for the licence which I think 68 local authorities applied for these the local authority was applying for. That is in the licences—they knew exactly what the Act was saying. first instance, and indeed, Manchester and all the There was no misunderstanding about that. others were asked to produce to the Panel the procedures they had gone through for consulting their population. That is before they actually Q100 Chairman: I have to say they were quite clear considered whether that was one of the conditions to us, both in their report and in their oral evidence, that were laid down in the terms of reference. that the location of East Manchester influenced their decision in favour of Manchester. Mr Caborn: All I can say is that that is not what the Q105 Viscount Eccles: Has the Department followed Act says. The Panel knew exactly what the Act was it and is it satisfied with the way that process has saying and when they gave that licence out, that was gone? a licence to the local authority, that local planning Mr Caborn: It was not for the Department to do. It authority, not an individual site. If there was a was for the Panel to make sure that there had been particular site given or supposedly given, that would consultation. not be the case, in terms of preferred bidders either.
Q106 Viscount Eccles: So there was no Q101 Chairman: I think I will take that as implying communication between the Panel and the that they were perhaps misguided to give it that Department on the matter of consultation? much weight. Mr Caborn: It was not the responsibility of the Mr Caborn: That is your opinion. Department. It was the responsibility of the Panel to reassure themselves that there had been proper Q102 Baroness Thomas of Winchester: Can you tell consultation by the local authority to make sure that us how wide the Manchester area could be, how they were actually acting in concert with their many miles away it could be from where we think it population and that there was support for the is going to be? application of a licence. 3638711001 Page Type [E] 19-03-07 21:38:51 Pag Table: LOENEW PPSysB Unit: PAG1
16 draft gambling (geographical distribution of casino premises licences) order 2007: evidence
13 March 2007 Rt Hon Richard Caborn MP
Q107 Lord Armstrong of Ilminster: Minister, if the Q109 Baroness Maddock: Can I just ask what proposal fails to meet the licensing criteria or if a bid sanctions the Gambling Commission will have to is withdrawn by a local authority, would you then make any changes? choose another location, a new location for the Mr Caborn: They can revoke the licence. That would licence, and if so, how would you set about it? be the ultimate one. I cannot imagine it happening Mr Caborn: We have not contemplated that. We have but let us assume that they broke the licensing been looking at the report. We will be consulting, as conditions to a degree that the Gambling I say, on the report. We are going to give the House Commission thought that they were acting totally the opportunity to debate that and we are fairly irresponsibly, they could take the licence away from confident that the House will agree that this is a them. Before you get to that, there will be a whole robust report. It is one that is subject to the criteria. series of dialogue with the operator to make sure that Therefore, we have not dealt with hypothetical they came back into their licensing conditions. questions, to be honest. Q110 Baroness Maddock: But how would they make Q108 Baroness Thomas of Winchester: Under what them do that, other than threatening? circumstances can a licence be revoked? We are Mr Caborn: They could fine them. There is anything talking about three years after the award of the first from a proper dialogue, to fining them, to putting premises licence. The Government have appointed a restrictions on them, and the ultimate is to take the team led by Lancaster University to evaluate each licence away from them. The Gambling Commission casino’s economic and regeneration impact. I just have those powers. wondered if you can tell us under what circumstances the licence could be revoked. If the casino only Q111 Chairman: Can you help us on when is the generates half the jobs set out in the original bid, earliest date that the Government, if it wished to, would you change the geographical distribution of could allow further regional, large or small casinos to the licences? be licensed, roughly speaking, assuming it takes a Mr Caborn: Let me say straight away that the body year or maybe two years for some of these to be built, that will have responsibility for making sure that the three years to be studied, then perhaps a year to licence conditions are adhered to is the Gambling assess and another year to make a further licence. We Commission on a day-to-day basis. The Gambling are talking about six or seven years, are we not? Commission is probably one of the strongest Mr Caborn: The one that you forgot, my Lord regulators that we have in this country, and we will Chairman, is that we have to come back to both expect them to use those powers if necessary. When Houses of Parliament against all that background for the licensee signs up to the conditions of the licence, you and the other place to make a decision whether that will then be policed by the Gambling they want that. So that would be decision of Commission on, eVectively, a day-to-day basis across Parliament. the 17, and indeed the other casinos that are operating as well. In terms of the piece of work to Q112 Chairman: So another year at least for evaluate the impact of that, you are absolutely right. Parliament. We have put a commission out on that and that will Mr Caborn: Let us put a decade on it. be a continued evaluation over those three years and that will report back to Parliament. That runs Q113 Chairman: So that is eight years? alongside another study by Lancaster University, Mr Caborn: I would say eight to 10. which is a prevalence study on the impact of gambling across the wider spectrum. But specifically Q114 Chairman: Eight to 10 years before there could on casinos, yes, we have a piece of work on that; on be any further casinos under this legislation. the day-to-day policing of the conditions of the Mr Caborn: That is a possibility. licence, that is the responsibility of the Gambling Chairman: It seems to follow, does it not? Minister, Commission. thank you very much indeed.
Letter to the Chairman from Rt Hon Richard Caborn MP I am grateful to you and the other members of the Merits Committee for the opportunity to explain some more of the background to the Draft Gambling (Geographical Distribution of Casino Premises Licences) Order 2007 at your oral session on 13 March. Inevitably due to the constraints on everyone’s time, we were unable to cover all the issues raised by your questions. As I promised to do at the hearing, I am therefore writing to let you have detailed answers to the questions which the Committee provided to me in advance of the oral session. 3638711002 Page Type [O] 19-03-07 21:38:51 Pag Table: LOENEW PPSysB Unit: PAG1
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I know that time is tight before you are due to finalise your report to Parliament, but if there is any further clarification you require, please do not hesitate to contact me or my oYcials. 14 March 2007
Supplementary Memorandum Methodology
1. Why did you appoint a Casino Advisory Panel rather than use the Department or the Gambling Commission? Unlike the other categories of premises licence provided for under the Gambling Act, it had been decided to limit the number of casino premises licences—only one regional, eight large and eight small casino premises licences would be permitted nationally. The Act also required the Secretary of State to make an Order determining which local authorities should be allowed to issue these premises licences. Inevitably, there was considerable interest among local authorities in securing these premises licences—the regional casino in particular held out the prospect of significant inward investment, employment and regeneration potential. The fact that some 68 local authorities ended up applying to the Panel underlines this. We needed a fair way of deciding which local authority should be entitled to issue the new licence. If Ministers had simply taken it upon themselves to decide which local authorities should be included in the Order, it would inevitably have drawn accusations of political bias. Indeed, even with the independent Panel, it suited some people to suggest that we were somehow fixing the process in favour of the Dome. That underlines why appointing an independent Panel who could assess this matter on an objective and transparent basis was so important. Appointing an independent Panel by way of an open competition also enabled us to ensure that the Panel had among its membership people with skills and experience at a senior, strategic level in: — the local or regional planning system; — regeneration of disadvantaged areas; — the leisure and tourism industries; and — the evaluation of economic change and its social impact. We would be very unlikely to have been able to find people with this level of expertise in these areas from within the Department or in the Gambling Commission. While we considered the suggestion that the Panel’s role should be given to the Commission, we did not consider that it was consistent with the role of the independent regulator for it to recommend where the new casinos should be located. It is the regulator’s role to ensure that those new casinos, wherever they are located, are operated in accordance with the requirements of the new Act. Even if we had concluded that it was not inconsistent with the Commission’s role, undertaking this task would have been a major distraction for Commission during a period where its priority has been establishing itself as the new regulator, and developing the new policies and procedures it will need in place to regulate the gambling industry from September.
Given the clear description of the Panel’s methodology in their Report, have you been surprised by the degree of opposition to their recommendations? We agree with the Committee that the Panel set out clearly in their report the methodology they used, and the reasons they came to the recommendations they did. The Panel did a very professional and thorough job. The fact is that the process has been fair, transparent and well understood by everyone involved throughout. We first announced the criteria against which the Panel would assess applications in December 2004, and these criteria have not changed since then. There was little or no opposition to the Panel or its terms of reference during the period between December 2004 and January 2007 when it reported. Indeed, there was a broad degree of consensus that an independent body should be asked to consider this matter. Whatever recommendation the Panel made, some local authorities were always going to be disappointed, and so some degree of opposition to the Panel’s recommendations was inevitable. The written evidence to the Committee underlines this: by and large, those local authorities that were successful in applying to the panel 3638711002 Page Type [E] 19-03-07 21:38:51 Pag Table: LOENEW PPSysB Unit: PAG1
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(eg Manchester, Leeds, East Lindsey, Great Yarmouth) describe the process as fair, clear and transparent; those authorities whose applications were unsuccessful (eg Blackpool, Havering, CardiV) are critical of aspects of the process. A few respondents buck that trend: some unsuccessful candidates are not critical of the process (eg Newcastle, SheYeld); a number of independent voices (eg Advantage West Midlands) suggest that the process was a “thorough and transparent one”; one academic is critical of the Panel’s recommendation. Another—Mark GriYths of Nottingham Trent University—had previously gone on the record as saying that Blackpool would not be the best possible test of social impact. We do understand the disappointment of those areas which were not recommended by the Panel, but this cannot override our responsibility to be fair to all the authorities that took part in the Panel process. Critics of the Panel’s recommendations, in particular those sympathetic to Blackpool’s bid, have suggested that the Panel ignored the recommendations of the Joint Scrutiny Committee that “destination” rather than “doorstep” casinos were less likely to increase social harm. The Panel was aware of the Scrutiny Committee’s recommendations. The Committee recommended that regional casinos be re-named “leisure destination casinos” to reflect the fact that they would be large scale entertainment complexes oVering gambling alongside a wide range of non-gambling facilities. That is the same vision for the regional casino that the government included in its national policy statement for casinos published in December 2004. However, the government has never accepted that regional casinos should be located solely in holiday or resort destinations, not least because it is impossible to define where these places are. Urban centres are just as likely to be tourist destinations as other areas. The national policy statement made it clear that the government was keen to assess the impact of the new casinos in a range of types of area, including urban centres and seaside resorts. This was, of course, when the intention was to have eight regional casinos in the initial phase. The Committee will be aware of the circumstances surrounding the reduction to one regional casino. It is also important to note that the Secretary of State is only required to lay down in her Order which local authorities should be able to issue premises licences. She is not responsible for deciding on which sites within those authorities the new casinos should be located. That is entirely a matter for the local authority. East Manchester covers a wide area, and it would be possible to identify potential sites in the area which were not located directly adjacent to residential areas. In any event, it is important to note that the potential proximity to residential areas was not something unique to Manchester’s bid. For example, Blackpool’s proposal was for a casino to be in the town centre—in a central location on the seafront, close to the Tower, and in the Panel’s words “close to some of the poorest residential areas of the town”.
Do you support their recommendations? Yes. We believe that the Panel has acted throughout in a fair and transparent manner. They have bent over backwards to be fair to everyone. No-one expected the Panel to hold public hearings into the shortlisted candidates, which were open to everyone including the media, but that’s what the Panel chose to do. It is clear from the Panel’s report that it has taken its terms of reference seriously, it has applied them in a balanced and consistent way and it has tested its results back against the original terms of reference.
Criteria
2. The criteria which you set for the Panel were obviously of key importance. Why did you choose geographical spread, best possible test of social impact, areas in need of regeneration and willingness to licence as the criteria? The terms of reference for the Panel drew heavily on the views expressed by MPs and Peers during the passage of the Gambling Bill. The new casinos permitted by the Act will be diVerent to those we have seen before in this country. The Gambling Act permits the new casinos to oVer a higher number of gaming machines; the regional casino will be permitted to oVer unlimited stake and prize gaming machines; the new casinos will be permitted to oVer facilities for betting; and, the one regional and eight large casinos will be permitted to oVer bingo. 3638711002 Page Type [O] 19-03-07 21:38:51 Pag Table: LOENEW PPSysB Unit: PAG1
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For these reasons, and in response to widespread concerns in Parliament and among the public, the government decided to take a cautious approach to the development of these new casinos, and only allow a limited number of new casinos to be licensed, while a proper assessment could be undertaken of their social and economic impact, and in particular whether their introduction led to an increase in problem gambling or increased the risk of problem gambling. As this was the primary reason for limiting the number of casinos in the first place, the primary criterion we asked the Panel to consider was to ensure that the areas selected for the new casinos would provide the best possible test of social impact. The other main driver for our policy were a number of local authorities who were coming to us saying that they were interested in the potential of larger casinos to help regenerate their areas and increase employment. Subject to the primary criterion, we therefore asked the Panel to consider which would benefit most in these terms. Given this level of interest, and in view of the need for a proper assessment of the likely social and economic impact, we also asked the Panel to ensure that the areas selected were willing to license a new casino. It would have been a waste of everyone’s time, and unfair to those areas which did want a new casino, to select areas which did not subsequently take advantage of an entitlement to issue a new casino premises licence in their area.
3. What did you intend by “best possible test of social impact” and by “regeneration”? Did the Panel have the same interpretation?
The government’s statement of national policy of 16 December 2004 made it clear that, in order properly to assess the impact of these new casinos, Government believed that there needed to be a suYcient number of casinos in each category to allow the impacts to be assessed in a range of areas and types of location that might be suitable (including, for example, urban centres and seaside resorts across diVerent parts of the Britain). Our primary view was that the areas for the new casinos taken together should provide the best possible test. Indeed, we believe that the areas recommended by the Panel across the three categories of casino do that— they encompass inner city, cities, towns, seaside resorts, and local authorities which include significant rural areas. We will be assessing the impact of all 17 new casinos, not just the regional casino. The circumstances surrounding the subsequent reduction in the number of regional casinos permitted by the Act have been well documented. This created a problem in that a single regional casino inevitably meant that that model could not be tested in a range of locations. The Panel sensibly recognised this, and decided to consider the extent to which each individual proposal would provide a good test. While some areas will have scored better than others against this criterion, the Panel’s report makes it clear that this in itself was not determinative of their recommendation on the regional casino, and no one single proposal emerged as the self evident favourite in provide the best test of social impact. Indeed, the report makes it clear that it eventually recommended Manchester because it presented the most complete package against all three of the criteria set for the Panel. The December 2004 national policy statement made it clear the Panel was asked to choose areas in need of economic development and regeneration (as measured by employment and other social deprivation factors) and likely to benefit in regeneration terms from a casino. It suggested that the regional casino in particular oVered clear potential for regeneration of areas across Britain. It will provide not just a range of gambling activities, but may include hotel accommodation, conference facilities, restaurants, bars, areas for live entertainment and other leisure attractions. The benefits of such a development could go much wider than the location of the casino itself. There are many parts of the country which could benefit from the regeneration that these kinds of leisure developments can oVer.
Why did you set “best possible test of social impact” as the primary consideration?
See answer to question 2 above. The primary reason why the government decided to limit the number of new casinos that could be licensed was so that a proper assessment could be made of the social impact of this type of casino. It was, therefore, of primary importance that the areas selected would facilitate that test in the best possible way. 3638711002 Page Type [E] 19-03-07 21:38:51 Pag Table: LOENEW PPSysB Unit: PAG1
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4. How can you be sure that benefits will be felt locally rather than by the investors?
We have included significant powers for licensing authorities in the Act to ensure that they can extract the greatest possible benefit for their local area from the licensing process for casinos. Schedule 9 to the Gambling Act 2005 provides for the process that licensing authorities specified in the Order under section 175(4) must follow when inviting and considering applications for the new casino premises licences and applications for provisional statements in respect of new casinos. As there are only a limited number of casino premises licences available, Schedule 9 requires licensing authorities to run competitions for these licences. The process for the competition is outlined in Schedule 9: — the licensing authority must first invite competing applications for the premises licence; and — it must then submit those competing applications to a two-stage consideration process: — Stage 1—Regulatory test—the licensing authority must determine whether, if it was entitled to issue an unlimited number of casino premises licences, it would grant each application. In making this determination, the licensing authority will apply the same tests and process as it would apply in respect of any other application for a premises licence. — Stage 2—Greatest benefit test—if more than one application passes the Stage 1 regulatory test, the licensing authority must determine which of the competing applications would, in its opinion, be likely to result in the greatest benefit to the authority’s area.
Next Steps
The Order permits each of the selected authorities to issue a casino licence but only after holding an open competition for proposals and once the winner has obtained planning permission and the other necessary licences.
5. Some bids to the panel included a preferred bidder: how can the subsequent competition be fair?
Paragraph 2 of Schedule 9 to the Act requires the Secretary of State to make regulations that licensing authorities must comply with when inviting competing applications. In particular, these regulations must make provision: — about the publication of invitations, including provision as to the manner and timing of publication and the matters to be published; and, — about the timing of responses. Paragraph 6 enables the Secretary of State to issue a code of practice about the procedure to be followed by licensing authorities when making both the Stage 1 and 2 determinations outlined above, and what matters licensing authorities should have regard to in making those determinations. The Department published a consultation document on the regulations and code of practice on 21 February 2007. The closing date for responses to the consultation is on 2 May 2007. The consultation paper sets out our proposals for ensuring amongst other things that: — licensing authorities run fair and open competitions for the new licences; and — the process for the competitions is transparent, and clearly understood by all interested parties. The proposals emphasise that licensing authorities must ensure that any existing relationship or arrangement they may have with any applicant does not aVect the competition in such a way as to make it substantively unfair when judged against the provisions of the Act. This should not have come as a surprise to anyone. This has been clear throughout. The Gambling Commission’s advice to licensing authorities published in April 2006 noted that authorities should think carefully before entering into any agreements or arrangements with casino operators which might be perceived to aVect their ability to exercise their stage two functions objectively and without having prejudged any of the issues [Para 17.12]. 3638711002 Page Type [O] 19-03-07 21:38:51 Pag Table: LOENEW PPSysB Unit: PAG1
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6. The premises licence procedure allows for interested parties, including local residents and businesses, to express views against the licence: how can this consultation be genuine, given that each local authority has invested heavily in its proposal? We anticipate that the local authority will have consulted before making its proposal to the Casino Advisory Panel. Indeed, the Panel asked local authorities to submit with their applications details of any consultations and of any local pre-existing polling or market research to establish the extent of support among the area’s population. This was central to the test of whether or not the local authorities applying to the Panel would be willing to license a casino. The Panel did not require local authorities to undertake any fresh polling on this matter because making this a requirement might have imposed an unwelcome burden on local authorities and council tax payers. At stage one of their consideration of the applications for casino premises licences, licensing authorities will have an obligation to consider all applications for the casino premises licence as they would any other application for a premises licence under the Act. Interested parties will be able to make representations at that stage, and the licensing authority will have to take them into account. It would be in breach of its statutory obligations if it did not. We have also proposed in our consultation on the Schedule 9 Code of Practice that local authorities should be encouraged to engage in active consultation with local people when developing the criteria against which they will assess which application would provide the greatest benefit to their area. This reflects the government’s view that local people are best placed to determine local needs and priorities, and what benefits they would like to see accruing to their local area from a casino development. For the first time, we have also given local authorities the power to resolve not to issue a casino premises licence in their area if they do not want to do so [Section 166 of the Gambling Act 2005]. In passing such a resolution, they may have regard to any principle or matter—so they have the widest possible discretion.
7. If a proposal fails to meet the licensing criteria, or if a local authority withdraws its bid, how will you choose a new location for such a licence? The Order under Section 175(4) merely authorises the 17 licensing authorities concerned to issue one of the 17 new casino premises licences. It does not require them to do so. There is no formal requirement for the Secretary of State to replace any of the 17 licensing authorities on the Order if for whatever reason one or more of them decide not to license a new casino in their area. All she is required to do is list which authorities should be permitted to issue the licenses. She will have fulfilled her obligation by making the order, irrespective of whether the local authorities concerned go ahead and issue the licences. If these circumstances do arise, it would technically be possible for Ministers to consider bringing forward a new Order listing some alternative authorities. It would be for Ministers to decide how they to determine which authorities to include in the draft Order. As with the current draft Order, any new Order would be subject to the aYrmative resolution procedure. However, we have not considered what is a hypothetical situation in any depth.
Evaluation The Government have appointed a team led by Lancaster University to evaluate each casino’s economic and regeneration impact. It will not report for at least three years after the award of the first premises licence. (Explanatory Memorandum, para 7.4)
8. Are the permissions to licence subject to review? Would you change the geographical distribution of the licences if a casino only generates half the jobs set out in the original bid, or indeed for any other reason? All premises licences issued under the Gambling Act are subject to the review powers set out in the Act. Any responsible authority or interested party may apply to the licensing authority for a review of the new casino premises licences at any time, if they feel that there are legitimate grounds pursuant to the licensing objectives of the Act. For example, if a casino had breached any of the conditions attached to its premises licence—for example, by allowing children into areas where they could even see the gambling facilities, then it would risk criminal prosecution and losing its premises licence. 3638711002 Page Type [E] 19-03-07 21:38:51 Pag Table: LOENEW PPSysB Unit: PAG1
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In the case of the new casinos, Paragraph 7 of Schedule 9 enables licensing authorities to enshrine any commitments that may have been made by casino operators during the course of the competition for the licence in a condition attached to the casino premises licence. Any breach of this condition could then be pursued in the same way as any other breach of licence condition.
9. The number of casino licences allowed under section 175 of the Gambling Act was reduced from your original proposal in a pre-dissolution compromise. What is your assessment of the current demand for such gambling in the UK; and do you think that this demand is one which the state should allow to be met? — When is the earliest date that a further regional, large or small casino could be licensed? — Why did you propose, in the bill as originally introduced, that the number of such licences should be left to the market? The Gambling Review Body chaired by Sir Alan Budd originally proposed what was essentially a market- driven approach to casinos. A brake on the proliferation of smaller casinos would be provided by setting minimum size criteria for the new casinos and through the planning system. The Joint Scrutiny Committee which considered the draft gambling bill, in its first report published on 25 March 2004 [HL63-I HC 139-I] was broadly supportive of this approach. It soon became clear that that there was considerable concern among members of the public and in Parliament about this proposal. The government acknowledged in its national statement of casino policy that the casino proposals in the Bill represented a significant change and proposed a more cautious approach in order to assess whether their introduction leads to an increase in problem gambling. The Government took the view that the risk of an increase in problem gambling would be reduced if a limit was imposed on the number of casinos. Ministers therefore decided to set an initial limit on the number of Regional, Large and Small casinos of eight each. The circumstances surrounding the reduction in the number of regional casinos from eight to one during the wash up have been well documented. Our policy was to take a cautious approach to the development of the new casinos. A reduction to one regional casino was consistent with that policy. It is also true to say that we were not prepared to jeopardise the important new safeguards for children and other vulnerable people that the Act contains. We have not made any assessment of the unmet demand for casinos. That is not the basis of our policy. However, the fact that some 68 local authorities made applications to the Casino Advisory Panel suggests that there is a significant level of interest in the potential of new casinos to help increase employment and drive regeneration. We have made it clear that we will make our assessment of the social and economic impact of the new casinos no earlier than three years after the award of the first casino premises licence. The Secretary of State has specifically ruled out any further consideration of this issue for at least the lifetime of the current Parliament.
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