Game on

The Gambling Bill may give the green light for regional casinos, but gaming companies will still have to overcome a raft of legal hurdles. By Simon Ricketts

The Gambling Bill will soon be considered by the Parliamentary committee, having completed its Commons stages on 24 January and having received a second reading in the House of Lords on 22 February. Introduction of the bill last October led to a succession of media scare stories as to the consequences of ‘super casinos’ being allowed to open. The Government was swift to react to media criticism, announcing on 16 November that initially only eight regional casinos will be permitted, with an equivalent ceiling on ‘large’ and ‘small’ casinos announced in December. It will be interesting to see how the concessions are viewed in this pre-election period – will the bill make progress, or will the casino issue bring down a bill that attempts to comprehensively update our gaming laws, taking account of modern trends and technology? Not so much “de-regulation”, as many have portrayed it, as “re-regulation”.

The most controversial changes inevitably relate to casinos. No longer will they be allowed only in certain parts of the country. Much larger facilities will be possible, with greater advertising opportunities. They will be open to the public up to 24 hours a day, they will no longer be on a ‘members only’ basis and they will feature gaming machines with unlimited cash payouts.

Three categories of casino are to be licensed: ‘regional’, ‘large’ and ‘small’. The prospect of regional casinos has attracted the most commercial interest and media comment, although ‘casino’ is perhaps a misleading term, as large areas within each complex will have to be devoted to non-gambling activities. As well as a gambling premises licence to be granted by the local authority, planning permission will also be required. The regional casinos will be the only ones allowed machines with unlimited payouts – up to 1,250 per site.

The Secretary of State for Culture, Media and Sport will appoint an independent advisory panel to advise on where the new casinos should be located. The panel will identify areas for the new casinos that will provide a range of types and a geographical spread of locations across the UK. As local authorities will be able to refuse to have a new casino of any category in their area, the panel will be advised to choose areas that are willing to license one. Such areas are likely to be “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” (Department for Culture, Media and Sport statement, 16 December 2004).

Broad views on the locations for regional casinos will be welcomed from interested parties, such as regional planning bodies. Before the panel finalises its recommendations it will need to ensure that the proposed locations for regional casinos are compatible with regional spatial strategies.

The panel will produce to ministers a list of up to eight recommended areas for each of the three categories of casino. The Secretary of State, after consulting with the Scottish Executive and the Welsh Assembly, will decide which areas to designate. The panel will start its work in 2006 and is unlikely to complete it before the end of that year.

The Government will ask the Gambling Commission to advise on the influence of casinos on problem gambling no less than three years after the first casino licence is granted. This three-year period will also allow an assessment of the regenerative and economic effects of the casinos. Depending on the outcome of this assessment, more casinos may then be licensed.

If there are more applications for casino premises licences than the local planning authority is authorised to grant, a ‘competition’ will be held by the local authority. The Local Government Association will be consulted on how the competition should be run, but it will be judged on a wide range of issues reflecting what is important in the area, local concerns and priorities such as employment and regeneration potential and design. Local authorities will set out their key considerations then invite operators to submit entries to the competition. A full premises licence will be granted only once planning permission has been obtained and the building constructed. The fact that the applicant’s proposal may win the competition will not automatically confer a grant of planning permission because licensing and planning functions of the local authority must remain distinct.

At every step of this untested process, there will be a significant risk of judicial review, whether from disappointed applicants, existing operators, pressure groups or local residents.

Existing casinos will be allowed to continue business and will be eligible to apply for the new categories of licences. They will not be subject to the ban on advertising or the 24-hour rule, but will be restricted to their current gaming machine entitlement, which allows 10 machines of up to category B, and will not be allowed to provide bingo or betting on real or virtual events.

The year ahead will determine the fate of the Government’s proposals. The complexity and potential rapidity of the changes, the implications arising from the disparate regulatory areas affected, the novel procedures proposed in terms of the advisory panel, and the prospect of local authority competitions – all overlaid with the political/media dimension – present a fascinating challenge for the legal profession.

Simon Ricketts is a partner in the planning and environment group at SJ Berwin