So who will get Britain’s super casino?

As U-turns go, this one has circled almost all the way round and back to the start. Just a few years ago, the Government announced plans for an unlimited number of regional „super casinos“ boasting slot machines with boundless jackpots, gaming tables and all the extras you would expect from a US-style gambling extravaganza: hotels, restaurants, bars, shops, conferences, Celine Dion, the lot.

But between then and now – just weeks before the deadline for applications to be submitted to the Casino Advisory Panel – everything has changed.

First, the Parliamentary Scrutiny Committee reviewed the draft Bill and confirmed its own worst fears with a trip to Australia, where „problem gambling“ is rife: people are unable to stop, no matter what losses they incur.

Worried that slot machine „warehouses“ would spring up across the country, encouraging us to throw our worldly savings down one-armed bandits, it recommended just eight new super casinos, eight large casinos and eight small ones (existing casinos have „grandfather rights“ and will be allowed to continue operating).

It was a massive change and ruffled feathers among overseas operators, which were already getting UK investment programmes under way. But generally, it was OK. The idea was to use the eight super casinos as a trial; should they prove economic and social successes, more could be built.

But then the goalposts moved again. „The general election was imminent and the Government had to get the Gambling Bill through,“ says Professor Leighton Vaughan Williams, the director of the betting research unit at Nottingham Business School. „But the price was that the Opposition, sensing a chance to embarrass the Government, got it down to one super casino.“

This was a real blow. After all, when plans to overhaul the UK‘s antiquated gambling laws were first announced, economists predicted that the explosion in casinos would add more than 100,000 jobs and encourage inward investment of around £5bn, as well as boosting the public coffers by some £3bn.

The panel has received 47 expressions of interest from local authorities. Blackpool, Glasgow, Cardiff, Coventry, Manchester, Birmingham, Newcastle and the Millennium Dome are thought to be vying for the super casino, among others.

But in keeping with the ever-changing position of the Department for Culture, Media and Sport, it appears the Government could make another U-turn. Richard Caborn, the minister for Sport and Gambling, has indicated that should there be a „consensus“ of opinion, he would be prepared to increase the number of regional casinos.

Professor Vaughan Williams believes the UK could end up with four. Blackpool, Cardiff and Glasgow – all front-runners for the single licence that is currently available – should get one each if the plan comes to fruition, and he thinks the Dome would be next in line. „That would give really good coverage, and all of those four have different infrastructures and backgrounds.“

Sticking with the current plans, however, most agree that the likely winner will be Blackpool.

„It’s a question of where you get the biggest economic and social benefits,“ argues Iain Wilkie, a partner at Ernst & Young, who is advising on a number of casino applications. „In terms of regeneration, London has the Olympics. Blackpool is the biggest seaside resort in Europe, it’s in decline and it needs regeneration. It has also led a responsible campaign, right from the beginning. Blackpool ticks all the boxes.“

Which is bad news for the other authorities chasing the licence. Tim Hinkley, the president and chief operating officer of Isle of Capri Casinos, a US group, argues for a more central location than the north-west town – such as his own project in the Rioch Arena in Coventry – believing it would attract more people.

Isle of Capri runs 18 casinos in the US, and Mr Hinkley points to the regeneration it has already sparked as well as the type of venues built: broad leisure complexes that appeal to families, rather than seedy gambling dens. When Isle of Capri opened in Biloxi, Mississippi in 1992, he recalls: „I was the bad guy in a lot of people’s minds. I had to spend a lot of time proving myself and our business model. So we’ve been through this before.

„We don’t just build casinos and then walk away – we continue adding on to them. The point is that if we’re going to put a regional casino in Coventry, that is the beginning, not the end.“

But one expert, who asks not to be named, does not believe the super casino will be run by an overseas operator. „Why would you give the bag of sweeties to a foreign investor? It’s also just an extra layer of controversy. You can imagine, at Prime Minister’s question time, David Cameron asking Tony Blair some barbed question and it being all over the press.“

The other big issue facing any potential operator is tax. At the moment, the sector pays a 40 per cent rate but it is hoped that this will be bought into line with what bookmakers pay, 15 per cent. Already, some overseas operators have murmured threats about pulling out should the Treasury decide against this.

Yet most believe a strong operator will still make a solid return on its investment, regardless of the tax rate. „Do you want a casino that’s attractive, that people will come to?“ asks Mr Wilkie at Ernst & Young. „Or do you want one that is a mega attraction, something people will travel the length of the country to go to because it’s got bright lights, sphinxes and Rod Stewart every day?

„That costs a lot and the returns have got to be able to pay for it. So tax is a negotiating point but it’s not going to make or break an investment return.“

The Treasury is likely to give some indication on tax in the Budget, a week on Wednesday, while the panel will decide on the locations by the end of this year. Most expect the super casino to be up and running by around 2010 at the latest, with smaller ones arriving before that.

The real gamble, though, is not what the Treasury does, or where the panel decides the casinos should be, or even whether the Government changes its mind, again. It is how the public reacts to the new casinos. Will we become problem gamblers, our towns turning into seedy gaming dens? Or will we just get bored, dooming the temples of luck to become the next Dome?

What the sector has to ensure is that the reaction is somewhere in the middle, and that it can win over the anti-gaming lobby. Because only then can operators take the gamble out of their investment as the UK becomes the Las Vegas of Europe.

Up for Grabs

The Gambling Bill in its current form allows for 17 new casinos in three different formats.

One regional casino

A „super“ casino with a customer area of at least 5,000 square metres (50,000 sq ft) and up to 1,250 gaming machines with unlimited jackpots.

Eight large casinos

A minimum customer area of 1,500 square metres and up to 150 gaming machines with a maximum £4,000 jackpot.

Eight small casinos

A minimum customer area of 750 square metres, and up to 80 machines. Unlike the others, they cannot offer bingo.