Licence to thrill

As Blackpool stakes its claim to cash in on a revolution in gambling laws, Jeremy Fleming finds lawyers poker-faced at the idea of local councillors controlling casino licences

Six months ago, Britain was looking forward to drinking alcohol all night without the bother of obstructive licensing laws.

No more 11 o'clock stampedes at the bar on Friday nights.

But the government dropped its proposals for extending alcohol licensing hours, claiming it does not have time in this parliament.

However, there is a silver lining: in exchange for long nights on bar stools, we are to be turned into a nation of gamblers.

Proposals released last month in a report published by a review body, which was chaired by Sir Alan Budd, formerly chief economic adviser to the Treasury and monetary policy committee, pave the way for a radical overhaul of gambling legislation.

The main recommendations are that a new single regulatory authority - a gambling commission - should license all gambling operators and key workers, take forward prosecutions where necessary, and impose financial penalties on people who fail to comply with legislation.

The commission would test and approve gambling machines, although spread betting would remain the responsibility of the Financial Services Authority.

To check the power of the commission, a gambling appeals tribunal would be established, and, crucially, licensing of gambling premises would pass from the hands of local magistrates to local authorities.

Casinos would be allowed to provide entertainment and alcohol on the gaming floor, while the concept of permitted areas - which currently rigorously restricts the geographic location of casinos - would be abolished.

Rules that determine how many slot machines should be permitted in a casino would be liberalised, so that houses with more than 80 gaming tables would be allowed an unlimited number of machines.

Professor Peter Collins, director of the centre for the study of gambling and commercial gaming at Salford University, has said that - at a conservative estimate - the proposals would mean that the gambling industry's profits would double, with the number of casinos in the UK rising from the current total of 120 to 450.

Unleashing huge casino resorts in the UK seems glamorous, and the idea that Blackpool could be transformed into a glittering sunset strip has been seized on by the media.

But the small coterie of specialist lawyers who deal in the area have mixed views about the proposals.

Elizabeth Southorn, a licensing specialist at City firm Richards Butler - who acts for a number of major bookmakers and sits on the lobby group Business in Sport and Leisure - welcomes the report's broad aspirations.

She says gaming is one area the government needs to address: 'We still live in a society in which gaming and betting are perceived as undesirable, whereas in reality they are well-regulated industries and everyday entertainment for many people.

'No one thinks of the National Lottery or scratch cards as being the same as mainstream gambling - but of course they are.'

For Julian Harris, a gambling specialist at City firm Pinsent Curtis Biddle with clients such as the Napoleon and Golden Nugget casinos in Leicester Square, the increase in slot machines would have a significant impact.

He says the proposals would help remove the stigma from gambling, and explains: 'A gambling licence is very much considered a privilege rather than a right.

And gambling has been regulated as though it were a vice needing to be controlled.

But this would change under the proposals, and machines will become far more profuse, and offer much bigger rewards.'

However, fellow Pinsents partner Craig Baylis has concerns.

Mr Baylis is an alcohol licensing practitioner as well as a gambling law specialist, and he maintains that one proposal - which would limit the amount of slot machines permitted in pubs to two - is unjust.

He explains that his brewery clients, such as the chain of JD Wetherspoon pubs, would be badly hit by such a rule.

On why the government is so keen to move ahead on gambling legislation, despite having abandoned its plans to liberalise the alcohol licensing laws, the lawyers seem sceptical.

One suggests that the alcohol reforms played well to the law-and-order lobby - with the aim of getting to grips with lager louts - before the election; but now that the election is out of the way the government is moving to liberalise the gambling market, which is more lucrative in terms of tax revenue.

But the provision for licensing decisions to be passed from magistrates' courts to the local authorities worries Mr Baylis.

He explains: 'The trouble with having local authorities making these decisions is that they are policy-driven and do not treat cases on their merits.

They are driven more by the interests of local residents than of the need for a fair hearing.'

Mr Baylis says this concern is illustrated by the effect that local authority decisions have on entertainment licensing, for which they currently have jurisdiction.

In a recent case he brought on behalf of a leisure client called Chorion - which applied for a late entertainment licence in the West End of London - Westminster Council was held to have failed to consider the application for a late entertainment licence on its merits, preferring to impose an arbitrary policy of not granting fresh licences to entertain past one o'clock.

Mr Harris echoes this unease.

He says that if local authorities take control of licensing decisions, there is a danger that there will be no limit to the amount of licences that they issue, and that a proliferation of casinos might be increased by competition between different local authorities that are eager to capitalise on a burgeoning industry.

He fears that deals could be done between operators and local councils: 'I'll build you a new children's swimming pool in exchange for a licence for a big glossy casino.'

Ms Southorn also has reservations about moving the licensing regime to the local authorities.

She says the way they deal with entertainment licences gives little faith that the regime for gambling would be efficient: 'Currently, local authorities may charge an administration fee for premises, which are licensed for entertainment.

However, the fee varies widely: in some parts of the country it costs 1,200 each year, in others 20,000.

If they license gambling, these disparities may become worse.'

David Clifton, head of licensing and leisure at gambling specialist firm Joelson Wilson & Co - which includes The Rank Group and Grosvenor Casinos among its clients - is also opposed.

He says: 'It is not the job of elected councillors to be impartial.

It will bring huge practical difficulties into an area where they do not currently exist.'

One of the guiding principles of the Budd report was the need 'to keep gambling free from infiltration by organised and other serious crime, and from money laundering risks'.

A loophole in the Licensing Act 1963, which meant that bingo halls and private clubs could introduce gaming tables, led to a proliferation of casinos.

These swelled to a nationwide total of 1,000 compared to only 120 today - until the Gaming Act 1968 rectified the situation.

One specialist, who wishes not to be named, explains that this encouraged illegal activity.

'In a purely money business, there is plenty of scope for money laundering,' he says, and that 5,000 gambled, say, on black and red at the roulette table can easily be won back by someone who wants to convert their money from illegal tender into safe cash.

There are other risks associated with gambling - underlined by the loss of a number of licences by several major gaming companies in the 1970s - when the police were alerted to criminal activity by reports of prostitution.

Other vices linked with increased competition in gambling include bribery of staff to encourage them to tempt high rollers into different casinos, and casinos issuing illegal credit lines as incentives for clients.

Mr Clifton says that these things are historical.

He explains: 'The popular image of gangsters with violin cases is completely false.

It is a very, very clean industry.

The casino and bingo world is strongly regulated.'

Ms Southorn says that proposals within the report to make all bookmakers, as well as gambling operators, undergo a 'fit and proper' test and be investigated in relation to their competence, knowledge, honesty and financial probity, will give the public confidence in the standards of professionalism.

Mr Harris predicts that public confidence in a new regime would depend heavily on the effective staffing and funding of the commission.

Ms Southorn adds that the proposed procedure for appealing against decisions of the commission seems imperfect.

'A tribunal would consider appeals only on matters of law, but it is unclear who would be on the tribunal: it would be better to bring such appeals within the mainstream judicial structure.'

Mr Harris says that a new Bill may be on its way soon.

'The consultation period for the draft is only until October, so they are moving at quite a swift pace.

It suggests that they might want to legislate late next year.'

However, the lawyers are not keen on the possibility of Blackpool becoming the English Las Vegas.

Mr Harris contends that the town would not have the hotel infrastructure to cater for more than one or two resort casinos.

He adds jokingly: 'Frankly, the weather is a factor - the difference between Las Vegas and Blackpool is that in Blackpool it rains 300 days a year.'

Ms Southorn is more loyal.

She says she has fond memories of childhood holidays in Blackpool 'before my father became more prosperous and we went to the West Country'.

But to her the idea of creating select gambling resorts where casinos are lumped together seems self-defeating.

'We don't have special zones for drinking and the cinema.

If new legislation is going to really encourage gambling as a respected industry, it needs to break through the public perception that it is something that needs to be ghettoised.'

Whether Blackpool sticks with fish and chips or twists with blue chips remains to be seen.

But either way, get ready for a sea-change in gambling.