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Winner stakes all
Local Government Chronicle – 10 December 2004

Blackpool sees the licensing of super-casinos as a return to more prosperous times. But is it a gamble too far, asks Mark Smulian

The wheel of fortune will spin for councils once the government's troubled Gambling Bill takes effect.

For some, there is the prospect of revenue and regeneration from a massive 'regional' casino, for others the prospect of a useful boost to the local economy from a smaller facility, and for yet others a threat of unwanted casinos they can repel with new powers.

Examples from France and the US show local government harnessing them as useful founts of extra money, and there are councils here that are hoping to do the same.

For anyone who has attended one of the numerous political or professional conferences in Blackpool, the idea of stretch limos disgorging high-rollers on the promenade will seem pretty improbable.

But Blackpool BC hopes to bring about a casino-led transformation of the local economy. Indeed, it has to. With the tourism economy that sustained it for decades in freefall, the town needs new income. The council lobbied to turn what was originally a bill making technical changes to gambling law into one that will usher in mega-casinos.

"We saw our chance and started to talk about joined-up government and the regeneration potential of casinos," says Alan Cavill, head of economic development.

Assuming the bill passes unhindered through Parliament, Blackpool has ambitious plans to take advantage of liberalised casino laws to bring visitors to a town that has been stricken as tourists shun it for cheap sunshine holidays.

Mr Cavill reels off the statistics of Blackpool's decline. The number of visitors has fallen from 16m to 10.5m over 15 years, and over a year fewer than 22% of hotel beds are occupied. Day visitors are down by 80% in the same period, and they spend 500m a year instead of 800m.

Bed & breakfast hotels in the town's five central wards have closed and turned into houses in multiple occupation, producing the 10th worst cluster of deprivation in England. "We have to do something as our staple industry is going down the pan," Mr Cavill says.

Whether casinos will be enough to save Blackpool is unclear, but the council has prepared a masterplan calling for two or three resort casinos of the largest sizes that will be permitted.

This project would provide initially a 400,000m2 casino development, including retail and leisure facilities, a conference centre and 5,000 new homes.

It would need 2.2bn of capital investment and require 500m of public money.

The council anticipates 26,000 new jobs would be created at a cost in public support of 9,500 per job, "well within English Partnerships' benchmark", Mr Cavill says.

Blackpool officers have commissioned impact studies and have visited Atlantic City, New Jersey, and Biloxi, Mississippi, towns in the US that suffered a similar decline and turned themselves around by attracting casinos.

Mr Cavill says: "Crime is an issue but there is no sign casinos will attract organised crime or social problems, as this is destination gambling where people come for the day to have fun and win or lose a bit of money; not doorstep gambling that ensnares people on the way home.

"It depends how you cascade down the economic benefits to make sure the population gains the advantage of it, otherwise you end up with a lot of poor people in an affluent area, which is a sure recipe for crime."

Southend-on-Sea BC has a smaller-scale version of Blackpool's annual seafront illuminations, but ceased decades ago to be more than a day-trip destination for tourists.

It functions largely like any other home counties town for commuters and local office workers, although unemployment is high by regional standards.

But memories remain of Southend's tourist glory days and leader Howard Briggs (Con) wants a resort casino with a large hotel and conference centre, facilities the town lacks.

A report prepared by the then chief executive George Krawiec in September, following his visit to Atlantic City and Las Vegas, said: "Without good-quality hotels, you will not attract large conferences. High-quality hotel operators will not come unless they can see a profit and I can see no other way of attracting them other than by this casino opportunity."

A joint proposal from the owner of an existing casino and operator MGM Mirage has since won support from council leaders, although the associated seafront residential development is sure to prove controversial locally.

But Mr Krawiec holds out the prospect of tempting deals, with a casino operator possibly paying to help solve an expensive landslide problem on part of the seafront. v "I see no reason why we should not [also] seek a regular contribution to our coffers since these developments will, I suspect, bring a constant flow of significant profit to those who operate them," he says.

An ace up their sleeve - how councils can say no

The Gambling Bill spells out a dual role for councils in authorising casinos under licensing and planning powers.

They will have to adopt a casino development policy, which, as things stand, could specify that no more should be opened. If the policy does not say this, a council must then examine applications on normal planning grounds, such as their impact on residential amenity, traffic generation and parking.

It remains unclear whether a casino application could be rejected on the grounds that it would generate public nuisance, such as excessive noise at night, although the Local Government Association is pressing for this power.

The government's concession that casinos will be a separate planning use class means owners of buildings in the 'leisure' use class will not simply be able to convert them into casinos without further permission.

As licensing authorities, councils will be able to reject applications on grounds of: prevention of crime; that the gambling that takes place is improper; or that children or other vulnerable people might be at risk.

A concession by the government to its critics on 16 November saw it place a cap of eight on the number of 'regional' casinos - the type sought by Blackpool and Southend.

Eight sites shared out regionally across Britain will inevitably mean competition between councils that want to attract casinos, and there is no clear mechanism yet to determine which bids will succeed.

Dame Sally Powell (Lab), chair of the Local Government Association safer communities board, says: "We oppose this. It is a decision councils should be able to take for their localities and sites should not be chosen by central government."

The US

Jackpot - how Biloxi's number came up

Biloxi, on the Gulf coast in Mississippi, was a seaside resort in decline before gambling was legalised in the state - one of the US's poorest - in 1992.

Since then, says mayor Andrew Holloway, the city's services and infrastructure have been transformed by its cut of revenues from its casinos.

This is divided by a formula that gives 8% of gross gaming revenue tax to Mississippi state, and 3.2% to the local community. Of this, 40% goes to Biloxi's general fund, and 30% each to public safety - which includes police - and schools.

In a speech to the Mississippi Gaming Commission, Mr Holloway hailed the economic transformation wrought by a decade of gambling revenues as "one of the great success stories in the country".

Biloxi went from around 1m visitors a year to up to 25m after the casinos opened, and the number of hotel rooms swelled from 4,000 to 17,000.

Gambling revenue has allowed the city to invest $80m (41m) in streets and drainage - "Infrastructure work we had neglected for years for lack of money," the mayor says - and it has ploughed $15m (7.7m) into affordable housing.

"We've gone from spending $5m (2.6m) a year on public safety to $25m (12.8m) today," he says.

The mayor concludes: "There's still one question that I get from our residents: 'Where's all of the casino money going?' I like to tell them, just look around."

France

In France, the 180 casinos are all municipal concessions and important contributors to councils' coffers, according to evidence given by leading operator Accor Casino to a British parliamentary inquiry.

The French public sector collected some 1.38bn (900m) in 2002-03 from casino taxes, which are negotiated locally.

Municipalities issue invitations to tender for casino licences, from which they receive both tax revenues and regeneration benefits. All chosen applicants are subject to a public inquiry and approval from the Interior Ministry. Casinos can be opened only in seaside, mountain and spa resorts and in cities with more than 500,000 inhabitants.

Once an operator has a concession they must also develop tourism and cultural activities, and provide food and drink.

A spokesperson for Accor says: "The establishment of a casino within a community generates new and sustainable resources in the form of financial and tax revenues.

"Part derives from the contractual payments made by the casino to the local authority and the rest from the taxes levied on the casino's operations."

The company says that casinos are often the largest single local tax contributor in small communities, contributing up to half of some councils' business tax income.