Memorandum submitted by Blackpool Challenge Partnership
1. Blackpool Challenge Partnership in conjunction with Blackpool Borough Council generally welcomes the sensible and comprehensive approach, taken by the Department for Culture, Media and Sport White Paper "A Safe Bet for Success", to gaming in the 21st Century. The Government's bold decision to relax the gaming laws has given Blackpool a timely and most appropriate opportunity to regenerate itself and reshape the resort into the exciting entertainment experience that the modern tourist demands. Whilst we do not agree with every single proposal within the White Paper, we support the de-regulatory thrust of the Paper.
2. In particular we see an opportunity to use the opportunities offered by a change in gaming legislation. The decline in the prosperity of Blackpool as tourists have increasingly chosen to visit sunnier destinations abroad is well documented. During the 1990s alone, we lost over 5 million tourist visits to the town and the number of guesthouses and hotels fell by a third. The result has been that Blackpool now experiences unemployment rates of between 9-14 per cent, well above the national average, and is the 32nd most deprived area in the country.
3. Some of the money that can potentially be generated by a new style of gaming, in a properly controlled atmosphere, could be channelled into supporting the redevelopment of our worn out Victorian infrastructure. There is an opportunity to produce a multi-faceted resort that is differentiated from an inland experience and provides an ambience that can compete with the best in Europe and indeed the world.
4. Press speculation, inevitably, has focussed on creating a Las Vegas of Europe. But our vision is of building a British seaside resort that can rival any holiday destination in the world with a mix of family and adult entertainment. We will be working hard at delivering upon this vision for a revitalised Blackpool over the coming months and years, but with this opportunity presented by the Government, whilst not a panacea in itself, we now have a powerful, potent catalyst to kickstart a new era for Blackpool.
5. Some of the money that can potentially be generated by a new style of gaming, in a properly controlled atmosphere, could be channelled into supporting the redevelopment of our worn out Victorian Infrastructure. There is an opportunity to produce a multi-faceted resort that is differentiated from an inland experience and provides an ambience that can compete with the best in Europe and indeed the world. There is also an opportunity for this legislation to provide the sort of added value that is being delivered by the lottery if the right legislation comes forward. This sort of approach will also build community support for such proposals and enable joint working between business and the community to deliver the right sort of changes for both sectors.
6. With the evidence that follows, we have tried to be pragmatic and looked to build on the Government's proposals by suggesting a number of additional considerations as part of the review of legislation in four specific areas:
(a) Support for the idea that a pilot area (Blackpool) should be established to test the effects of large scale gaming in the form of resort casinos.
(b) Regeneration as a specific intent of the review of the gaming legislation.
(c) A request for legislation to consider how gambling profits might directly benefit local communities and regeneration.
(d) A separation of casinos from their existing use class order in planning definitions
(e) Additional evidence in respect strengthening the protection of vulnerable groups, especially children, from the effects of problem gambling.
7. Whilst we in the Partnership welcome the Government's confidence in local authorities in respect of licensing controls for gaming establishments we recognise that this will have to be within a tightly controlled framework that provides equality of opportunity across the country. Unfortunately this removes any chance we would have to affect the quality and appeal of potential developments, which would enable them to contribute to improving the quality of our resort and its regeneration.
8. The Committee will be aware, for example, that casinos fall into the same planning use class order as other entertainment complexes. Because of its history Blackpool already has more than 30 buildings that would not require planning permission to become casinos. The only control we could exercise over these buildings would be the granting of a license. This would not allow any control over the refurbishment, location or impact of such developments and would therefore be a huge lost opportunity.
9. There is also a concern that existing large bingo halls, often placed amidst residential locations, could transform themselves into gambling "sheds" with only the licensing of such establishments protecting and controlling that possibility. We feel that the opportunity lost far outweighs any concerns the private sector may have about controls on free development. We will need the tools in Blackpool to control the impact on the community especially in Blackpool where these gaming sheds could be created without any positive benefits.
10. In order to take advantage of the development opportunities in terms of regeneration we propose that in conjunction with a review of the legislation a new planning use class order is established for casinos. This would mean that any development or re-development work would be subject to the planning system, in the control of the local authority. This would be a far more appropriate opportunity, than licensing, to influence the appearance, location and impact of any development so that it can add to, in our case, the regeneration of an area.
11. Planning powers would also give the opportunity to provide a clear definition for a resort casino that is tied to anywhere having the ability to host large numbers of gaming machines. This provision would then in turn be tied to a requirement for leisure, hotel and conference use that would then go a little further than simply the size of the gaming floor.
12. Furthermore the inclusion of the planning process in these developments will require economic, transport and environmental impact assessments to be carried out where the buildings are of appropriate size. This would fit well with other Government policies in respect of car usage, employment and global warming. Paragraph 10.28 of the paper specifically mentions the need to join up policy. Consider for example the proposal to withdraw the need to establish demand from the licensing controls; this would mean that out of town gaming/casino developments would be possible, and likely, but clearly these would not meet many environmental concerns or provide support to a locally depressed labour market.
13. Despite the DCMS paper's conclusion in paragraph 4.30 that there is no case for a pilot area for resort casinos we disagree and would hope that we can demonstrate the significant benefits of this approach. There is widespread support for this approach and we at Blackpool Challenge Partnership along with the Council are keen to see these developments, with the right payback, be part of the wider regeneration strategy for Blackpool. That strategy already exists and we are about to commission a Masterplan to reshape our resort. resort casinos would be the ideal economic engine to fuel this required change and we hope that the following points will be considered.
14. We are fully supportive of the contents of chapter 7 and indeed of the tone of the report that requires that careful attention be paid to the social effects of any change in the gambling laws. Indeed it is partly for this reason we perceive that consideration for pilot status should be reconsidered. It will be difficult to assess what impact any change to the law will have if this de-regulation occurs across the country all at once. We believe that the overall impact of the changes could be beneficial but again this will be difficult to prove in the absence of any control.
15. Whilst we appreciate the content of paragraphs 4.29 and 4.30 we cannot agree with their conclusion that "there is no case for pilot status for any area or developer". Research from across the world has shown that it is difficult enough to establish the impact of resort casinos and gaming expansion when this is carried out in pilot or controlled areas. It would surely be impossible if this were done across the country all at once.
16. By allowing development of gaming across the country the legislation may leave itself open to criticism from many angles. It will be claimed that it will cause all manner of social pressures none of which could be proved or disproved. We would therefore argue that rather than rushing in and opening up the whole UK market, a pilot area should be established first to allow research to be conducted on the benefits, or otherwise, of the development of resort casinos in the UK. Phased de-regulation in this way will allow regulators a degree of control on the process that would be lost if the Government continues to favour an explosion of gambling through a "Big Bang" approach.
17. We believe that Blackpool would make the best home for such a pilot study. Resort casinos, in our view, are best located in traditional seaside resorts that have the right blend of fun and entertainment to make them compliment existing attractions and not take over. Blackpool, being a self contained area (with its two neighbouring authorities) that already has a large influx of visitors, will be able to determine what the overall effect of resort casinos and gaming expansion will be in a controlled manner. We believe that the international competitiveness of UK tourism would benefit most from focusing the development of such casinos in a single resort rather than spreading development too thinly across a myriad of different locations in a laissez-faire fashion. If Blackpool were granted exclusivity for a period of time, this would make for a far more attractive tourism proposition than if numerous projects were to emerge scattered throughout the UK, thus it would be more of a benefit to UK plc. The town already has experience of assessing the impact of tourism and has strong baseline statistics to work from. (For example falling visitor numbers and declining visitor spend figures).
18. Blackpool also has the support of the North West Development Agency, North West Tourist Board, the British Tourist Authority and even GamCare. All of these bodies support both the idea of a pilot and its location in Blackpool. We further believe that only Blackpool has the vision, culture and existing entertainment infrastructure that will make them a success. Blackpool, despite declining numbers, is still the UK's most visited resort and will only be enhanced by such development. More importantly, we have the support of the local community who back the proposals to bring resort casinos to Blackpool by over 70 per cent according to independent research. That is why developers are queuing up to invest in the town.
19. We also believe that whilst the other forms of gaming relaxation described in the report would be almost entirely domestic the only one that could buck this trend would be resort casinos. There is no equivalent product in Europe and there is therefore a potential market that is currently lost to other parts of the world. Furthermore we believe that the only way of establishing resort casinos as an international product is to test this market. Perhaps this more than any other reason is the strongest argument for a pilot. It is surely right to try and attract foreign visitors and money to our shores to raise revenues as well as giving the indigenous population the freedom of choice.
20. It has also been clearly established in Australia that many of the positive effects of gambling expansion are lost when there is no area focus to the development. A blanket relaxation to allow multiple use gambling centres and resort casinos would probably not deliver the opportunities for regeneration and economic change that many resorts and other towns are in need of. On the other hand, there have been clear regeneration benefits for certain communities in the United States, such as Las Vegas, Atlantic City and Biloxi, where de-regulation has only been granted in a limited number of localities.
21. The economic and social impact of gambling liberalisation is surely one of the biggest unknowns for the Government to consider and one of the most interesting either positive or negative. Resort casinos have many attractions in this regard these include:
(i) Limited number of larger establishments easier to control in respect of both money laundering and problem gaming.
(ii) Regenerative impact of high quality new buildings far more significant.
(iii) Economic impact studies suggest in excess of 3,500 net new jobs per casino.
(iv) Even the idea of these buildings has dramatically increased the interest amongst other developers. For example groups of hotels as being bought up on the promenade where no previous interest has been shown.
(v) The concept responds to the DCMS's own "Tomorrow's Tourism" report that demanded that resorts should be visionary and reinvent themselves.
(vi) Larger buildings will deliver better opportunities for planning gain.
Dealing with the Downside
22. Crime and problem gambling are clear issues that are identified by the DCMS paper and the Budd report. Sections six and seven of the DCMS paper deal with these issues and the partnership and indeed the Borough Council are fully supportive of the proposals in both sections. It is especially right and proper that children and gambling are kept apart but the Council would ask the Government to include the use of AWP machines by children in the research that is proposed to monitor the downsides of gambling for individuals.
23. In respect of the effects and pressures of problem gambling on the social economy; Blackpool is well placed, as a unitary authority and with a Primary Care Trust covering the same boundary, to consider the effects on the social and health systems of increased access to gambling. Paragraphs 7.16 and 7.17 refer to the use of NHS services in assessing the potential problems and we feel that the Social and Educational services will be equally important in making this assessment.
24. The Council also agrees that the Gambling Commission is the right place to have the regulatory powers to oversee operators once they have received a licence. We do however feel strongly that the proliferation of smaller mixed gaming establishments and casinos will make it more difficult to both oversee operators and monitor the effects of problem gaming. This will be a particular problem in respect of high pay-out gaming machines and their proliferation. This has been clear in other countries and indeed in our own country in the 1960s as indicated in paragraph 4.28 of the paper.
25. The Council would urge the DCMS to consider carefully the minimum size of resort casinos and using these as the major way of expanding the use of gaming machines, at least initially. We would suggest that gaming floors for resort casinos should be closer to 10,000 square metres and that there should be a mix of gaming and non gaming development within each casino that should also be to minimum sizes.
A Local Financial Link
26. The DCMS paper has not considered the question of hypothecation. This is a pity as there is clear evidence that hypothecating a small amount of money generated from gambling revenue back into the local community has brought significant regeneration benefits in the United States.
27. Atlantic City probably provides the clearest parallel with Blackpool. This seaside resort had fallen on hard times until the 1977 Casino Control Act began to transform the city. Today, it has 12 casinos, grossing $4 billion and earning $450 million in tax income. They have helped to create 50,000 jobs. However we do not think that Atlantic City alone is a good model for all aspects of regeneration. Although Atlantic City has delivered strong economic regeneration, more recent examples such as Biloxi, Mississippi has created a model that hypothecates 3.2 per cent of gross gaming revenue to create additional funds for the city for specific projects such as crime fighting and improving the education system.
28. We have consistently called for something similar to apply in the UK through the creation of a local regeneration fund should the Government de-regulate gambling to allow resort casinos to be developed. Whilst we feel that this would have been a good way of ensuring that local services and conditions can keep pace with private sector developments fuelled by gaming, it recognises that this is not a generally accepted concept.
29. We do feel that there is an obligation to minimise the negative social consequences when proposing this significant change to the gaming laws. As mentioned earlier the idea of bringing some of the profits back into the local community will help to build community support for proposals and fuel quality regeneration
30. If such explicit hypothecation into local services is not possible then we would hope that Government will consider the use of some or all of the following:
(i) The Non Domestic Rate system. The Government already has proposals to bring forward American style Business Improvement Districts, where by agreement, businesses within an area agree to a levy on the NNDR which is then retained locally to improve the services and appearance of that local area. We would suggest that this process be extended to cover resort casinos perhaps as part of the planning agreement and that consideration is given to top slicing an amount of the NNDR for local use to mitigate and enhance the effects of such developments. Indeed there would be no net loss to the exchequer if 100 per cent of the NNDR on resort casinos raised was spent locally to regenerate and improve local services.
(ii) A local tax on the number of gaming machines or perhaps rooms in hotel attached to resort casinos.
(iii) More flexibility in the planning system through the Section 106 system to allow community benefits to arise from the development of resort casinos. For example education or health facilities could be constructed as part of a planning agreement for a resort casino.
31. In short a local financial link will allow not just the physical regeneration to take place but also the much needed social and people based regeneration that will ensure that the local population will also benefit from these developments.
IMPACT ON THE NATIONAL LOTTERY
32. We do not wish to comment at length on the impact of the above recommendations on the National Lottery. Although we recognise this is an important part of the Committee's Inquiry. The National Lottery, per se, was outside the remit of the Government's Gambling Review, however, it was obliged to consider the impact of any of its proposals on the National Lottery.
33. Naturally, the Government is keen to ensure, especially as revenues are currently down, that the introduction of more gambling opportunities does not impact adversely on the National Lottery and, most importantly, the good causes. We are very sympathetic to this objective.
34. In chapter 35 of Sir Alan Budd's Report, he lists eight proposals that may have some impact on the National Lottery. It is important to note that neither Sir Alan, nor the Government, nor to our knowledge any serious commentator, sees the development of Resort Casinos as having an impact on the National Lottery. We would agree with this. It is our view that Resort Casinos do not "compete" with the Lottery and therefore do no take away any money from good causes.
35. Blackpool is a great town, synonymous with seaside fun and entertainment, but although millions of people still visit the town, Blackpool is struggling to keep up with the competition from increasingly accessible foreign holiday resorts.
36. We applaud the Government for taking up the challenge of the Budd Report and coming back quickly with its White Paper which envisages a de-regulated gambling industry fit for the 21st century. In particular, we welcome the clear proposals to liberalise casino regulations to allow the development of resort casinos.
37. However, whilst we broadly support the outcome that the Government envisages from its reforms, we would urge it to adopt a more controlled, de-regulatory process than the "Big Bang" laissez-faire approach it currently proposes. We recommend four minor modifications suggested above:
A new planning use class order is established for casinos.
Protection of the innocent.
Hypothecation of gambling income to be invested back into local communities.
Increased minimum size of resort casinos to reduce proliferation of smaller casinos.
And most importantly, the granting of pilot status for Resort Casinos to Blackpool so that proper research can be conducted into their regeneration benefits in the UK.
38. We would urge the Government to act quickly to introduce this legislation so that the UK, and Blackpool in particular, can quickly take advantage of a new, modern gambling framework that will benefit all.
ABOUT THE BLACKPOOL CHALLENGE PARTNERSHIP
The Blackpool Challenge Partnership (BCP) was established in 1996 to bid for, and then deliver, schemes under the Government's Single Regeneration Budget. It now involves 50 organisations from the public and private sectors including Blackpool Borough Council, tourism businesses, other major employers in the town, the police, the church and voluntary groups.
The BCP has been fully engaged with the Government's process to review gambling legislation in the UK. We submitted a paper, "The Renaissance of Blackpool through the De-regulation of Gaming" to Sir Alan Budd's Gambling Review Body, gave a presentation to the Review Body when they visited Blackpool and submitted a further paper, "The Renaissance of Blackpool: A Response to the Gambling Review Report" as part of the Government's consultation leading up to the publication of the White Paper, "A Safe Bet for Success".
Throughout this process, the BCP has consistently supported the development of Resort Casinos in Blackpool as a vehicle for economic regeneration of the town that will benefit the whole community. We now welcome the opportunity to present to the Department of Culture, Media and Sport Select Committee's Inquiry into the Government's proposals for Gambling.
13 May 2002