Super casino controversy continues

United Kingdom

This article was produced by Olswang LLP, which joined with CMS on 1 May 2017.

The Government's plans to introduce licences under the Gambling Act 2005 for Britain's new wave of regional, large and small casinos have been thrown into disarray. Not only did the House of Lords reject the Order to introduce the casino premises licences in its current form, but the British Casino Association has also been granted leave to challenge the introduction of all seventeen proposed new casinos by the High Court.

The Panel's decision

On 30 January 2007, the Casino Advisory Panel announced its decision to recommend that, to the surprise of the industry and the media, the licence for Britain's first regional casino should be awarded to Manchester City Council. The recommendation was subjected to widespread criticism, focusing on alleged missed opportunities for regeneration in either of Blackpool or the Millennium Dome site in Greenwich, which had long been seen as the two frontrunners.

It appears that the Panel's decision was based largely on its belief that its primary role was to ensure that the areas selected provided the best possible opportunity to test the social impact of the proposed new casinos. The Greenwich and Blackpool bids had instead focused more on arguments for regeneration, which appears to have been treated as a secondary consideration.

On 5 February, John Humble MP tabled a motion expressing "surprise and regret" at the Panel's decision, receiving the support of over 100 MPs. In addition, the decision was criticised by the House of Lords' Merits of Statutory Instruments Committee, which claimed that the Panel's approach was flawed because a city council could, in any case, relocate a casino site to anywhere within its boundaries. It issued a report claiming that "in essence the panel was selecting candidates for a research project" and that this wrongly took priority over "more common sense issues" like the need for regeneration.

The vote in the House of Lords

Notwithstanding this criticism of the Panel's decision, the DCMS decided to adopt the recommendation. The Government also resisted calls to separate out the controversial Manchester regional casino licence from the proposal to introduce the 8 large casino and 8 small casino licences to various other local councils.

The matter was put before both Houses of Parliament on 30 January, in the form of the Gambling (Geographical Distribution of Casino Premises Licenses) Order 2007. The Order was approved in the House of Commons by 274 votes to 250, but was rejected in the House of Lords by 123 votes to 120. Instead, the Lords approved a motion proposing that a Parliamentary Joint Scrutiny Committee of both Houses should be re-convened to re-examine the Casino Advisory Panel's decision.

It would appear that the Lords' decision was based largely on opposition to the Manchester regional licence, with the 16 large and small casino licences being relatively uncontroversial. Indeed, the consensus appears to be that a bill which proposed only the introduction of the large and small casino licences would be adopted by Parliament. However, it appears that this is unlikely to happen in the short term, as Tessa Jowell has ruled out any new proposals before local and regional elections in May.

Judicial review

The Government suffered a further setback on 3 April, when a High Court judge granted the British Casino Association leave to challenge the new regime by means of judicial review. The Honourable Mr Justice Collins said that the case should be heard as a matter of urgency before the High Court, and a three-day hearing is expected to take place before 25 May. The BCA is expected to argue that the existing casinos are being treated less favourably than the proposed 17 new casinos, and that long-established businesses and jobs would be threatened if the proposals were to go ahead.

The timing is particularly difficult for the Government, as any reintroduction of the proposals before Parliament would most likely coincide with any Labour leadership contest. Given that, from his latest budget at least, it appears that Gordon Brown opposes the expansion of gambling in the UK, the future of the new casino regime seems more uncertain than ever.