Blair is urged to cut plan for U.K. casinos

Reed V. Landberg and Robert Hutton

Thursday, Oct. 28, 2004 | 9:13 a.m.

U.K. Prime Minister Tony Blair's government may scale back plans for U.S.-style super-casinos after some lawmakers in the ruling Labour Party joined the opposition in demanding changes to proposed legislation.

The law would allow companies to build complexes such as one announced Oct. 12 planned by Caesars Entertainment Inc., the world's largest casino company. The complex will cost 650 million pounds ($1.2 billion) and be built on land around the English national soccer stadium at Wembley, a London suburb.

Lawmakers said the planned legislation, which the government estimates will generate as much as 5.5 billion pounds of investment and create as many as 85,000 jobs, will encourage gambling and may add to consumer debt and increase poverty.

"Instead of trying to encourage further gambling and debt, wouldn't it be far more sensible to reduce these problems?" David Winnick, a Labour member of parliament, asked Blair during the prime minister's weekly question time in the House of Commons. "The last thing we want is a casino-type society."

The government says the law may boost the amount spent on gambling in the U.K. by 40 percent. Blair says the 36-year-old gambling laws need modernizing and wants to prevent children from using slot machines. Opposition Conservative and Liberal Democrat members of Parliament have proposed amendments to force the government to cap the number of big casinos.

The gaming industry supports 100,000 jobs in the U.K. The Wembley project announced by Caesars Entertainment would include a 75,000-square foot casino, 400-room hotel, spa, stores and convention space.

The House of Commons will debate the measure Monday when the bill has its second reading. Labour's control of two-thirds of the seats in the Commons probably will allow the legislation to progress, though government ministers may offer concessions in the coming days to defuse the dispute.

"I do understand the concerns," Blair said in reply to Winnick. Blair argued that 90 percent of the provisions in the bill will force "better regulation" and "restrict access" to gaming to adults.

The bill says slot machines paying prizes of more than 2,000 pounds will be allowed for the first time, restricted to the largest casinos because of concerns about the effects on gamblers. About 6,000 machines from some small businesses, including takeaway food outlets and taxi offices would be removed.

Conservative lawmakers and other opposition party members said the legislation as written will open the way for U.S. companies to take over more of the British gaming industry. Companies including Las Vegas-based MGM Mirage and Kerzner International Ltd. of the Bahamas plan to take advantage of the new laws to build casinos in the U.K.

"Isn't the bill in fact further evidence of the fast- evolving special, if not unique, relationship between this prime minister and the United States?" Elfyn Llwyd, a lawmaker from the Welsh nationalist Plaid Cymru party, asked Blair.

Blair said Tuesday the government expects no more than 40 of the super-casinos to be built. Today, he said local authorities would have the ability to turn down permission for such facilities. That addresses one of the demands of the Conservatives, who plan to vote against the bill.

Stanley Leisure Plc and Rank Group Plc, owners of casinos in the U.K., have said the country's $3.8 billion gambling would benefit from deregulation. Liverpool, England-based Stanley Leisure outlined plans a week ago to build a casino complex in Leeds at a cost of 125 million pounds in a bid to benefit from the relaxation of gambling laws.

"The laws on gambling need updating, particularly to address online gambling, which currently is completely unregulated," said John Whittingdale, the Conservatives' spokesman on gambling. "The bill as it stands opens the door to the influx of a large number of American-owned super-casinos in our towns and cities."

The amount spent on gambling will rise to 12.5 billion pounds in five years from 8.7 billion pounds in the year through April 2004, the government estimates, increasing tax revenue. Money will be channeled into investment in cities such as Blackpool, a seaside resort in northern England, that's "urgently in need of regeneration," Blair said.

U.K. law currently forbids machines paying prizes exceeding 2,000 pounds. Casinos are allowed a maximum of eight each. All casinos are restricted to members and gamblers must have been members for 24 hours before they can enter. Casinos may also only be built in certain areas defined by law.

The bill scraps the 24-hour rules and the restrictions on areas where casinos may operate. It lets casinos larger than 5,000 square meters install up to 1,250 no-limits machines.