Gaming shake-up could bring £3bn boost

The Government yesterday announced a radical shake-up of the gambling industry, setting the stage for the arrival of a myriad of Las Vegas-style casinos into the UK, as it published its long-awaited draft gambling Bill.

The move could also prove a winner for Gordon Brown, the Chancellor of the Exchequer, since liberalisation could create up to 117,000 new jobs, attract £5bn of inward investment and boost the public finances by as much as £3.1bn per year.

That could help fill a black hole in the public finances, which independent economists believe will require £10bn a year of tax rises.

Tessa Jowell, the Secretary of State for Culture, Media and Sport, laid out a raft of measures to shake up current legislation, which dates back to the 1960s. "Since then, attitudes to gambling have changed and the law has failed to keep pace with rapid technological change," she said.

Among the proposals contained in the Bill are an end to the rule allowing casinos to be set up only in designated areas as well as the end of a rule requiring membership of a gaming or bingo hall at least 24 hours before playing there.

Remote gambling, on the internet or on mobile phones or interactive television, will also be licensed and regulated for the first time and a regulator, the Gambling Commission, will be set up.

Ms Jowell said the Commission would be "a force to be reckoned with" with powers to impose unlimited fines on licensees in the same way as the Financial Services Authority. The draft Bill will now go for public consultation and pre-legislative scrutiny. The committee is expected to report its findings in Easter, after which the Bill will be put before Parliament - although that may not happen until December of next year.

City analysts yesterday also welcomed news that the UK's bookmakers would be able to keep fixed-odds betting machines in their shops.

Lou Pirenc, an analyst at Morgan Stanley, said: "I don't think there are any significant surprises in terms of casinos or the bingo clubs, which is all good news for the industry."

However, he said the Government's decision to ratify a code of practice on the fixed-odds machines was positive news for the bookmakers.

Hilton, for example, is expected to benefit from this decision since analysts now expect the group to be in a better position to put a value on its gaming arm, Ladbrokes. Industry experts expect this might eventually lead to a demerger of Ladbrokes.

Shares in William Hill closed up 4.5 per cent at 375p while those of Stanley Leisure finished up 4 per cent at 367.75p and Hilton was up one per cent at 207.75p.

The proposed changes in the draft gambling Bill will almost certainly see the arrival of Las Vegas-style casinos into the UK. A host of big-hitters in the US, including MGM Mirage, Harrah's Entertainment and Isle of Capri Casinos, have already unveiled plans for joint ventures dependent on the legislation being passed through Parliament.

A report, commissioned by the Cross Industry Group for Gaming Deregulation, has found deregulation would give the Treasury £300m a year in gambling-related duty.