British government moves to loosen gambling laws

Ed Johnson

Friday, Oct. 15, 2004 | 9:12 a.m.

LONDON -- Seeking a dash of Vegas glitter, Prime Minister Tony Blair's government said Thursday it will introduce legislation within weeks to allow giant casinos offering unlimited jackpots to set up across Britain.

Current law permits small gambling houses that operate as private clubs with traditional table games but only a few slot machines. The British gaming industry's biggest trade group criticized the proposal, saying its members couldn't compete with mega-casinos.

The move to loosen Britain's gambling laws has been eagerly awaited by major U.S. gambling interests such as Caesars Entertainment Inc. and MGM Mirage Inc.

The Goldman Sachs investment firm has said the new rules could see up to $6 billion invested in the British casino market over the next five years. Iain Wilkie, an Ernst & Young partner in London, said he expected $9 billion in investments over a decade, mainly from the United States but also from South Africa and Australia.

Government officials hope the Gaming Bill will be approved by Parliament by the middle of next year, allowing casino complexes currently unseen in Britain.

Under Britain's 1968 Gaming Act, casinos are open only to members and gamblers must apply for membership 24 hours before they can enter.

Rules banning live entertainment and alcohol served at gaming tables have recently been lifted, but the clubs are still restricted to eight slot machines, with a maximum bet of 50 pence (90 cents) and jackpots limited to 2,000 pounds ($3,600).

The draft legislation would scrap the 24-hour rule and let casinos that are larger than 6,000 square feet install up to 1,250 so-called "category A" slot machines, which have unlimited stakes and jackpots. The government says only one of Britain's 130 current casinos is that big.

The prospect of the changes already attracted several grand proposals.

Earlier this week, Caesars announced plans for a $600 million hotel-casino near London's Wembley National Stadium. Subject to approval, it would boast 400 bedrooms, spa, swimming pool, designer shops, convention and meeting facilities, restaurants, bars and lounges, along with 75,000 square feet of gambling space holding 135 gambling tables and 1,250 slot machines.

MGM Mirage and Harrah's Entertainment also have announced deals to build big casinos, looking to take advantage of a nation in which 72 percent of the population -- some 33 million adults -- gambled an estimated $65 billion in 2001.

The government's Department of Culture, Media and Sport said the legislation would require casinos to get approval from a new Gambling Commission and planning permission from local authorities. Such controls, together with market forces, would limit the number of new casinos to between 20 and 40 across Britain, the department said.

"Our concern is the protection of the public and introducing reform in a controlled way," said spokesman Anthony Wright. "We do not want gambling ventures seeing this just as an opportunity to make a quick buck. There will be a strong element of social responsibility and giving something back to the local area."