Government wins casinos ruling

The High Court yesterday upheld as lawful Government plans to create 17 new casinos, including the first Las Vegas-style "super-casino".

A judge rejected accusations by the British Casino Association (BCA) that Culture Secretary Tessa Jowell had unfairly and unlawfully failed to provide "a level playing field" for existing casinos to compete with the new multi-million pound operations.

Lawyers for the BCA, which represents the interests of more than 90% of current gaming businesses, said they faced being treated as "second-class citizens" and losing up to £120 million a year in profits.

But Mr Justice Langstaff ruled at London's High Court that the legal challenge failed on all counts.

Michael Beloff QC, appearing for the BCA and four of its member companies, had accused Ms Jowell of "closing her mind" to the possibility of making greater provision for existing premises, including access to lucrative gaming machines.

Mr Beloff said there had also been inadequate consultation and Ms Jowell had been "materially mistaken on a number of material facts".

He argued that the Transitional Order, made under the 2005 Gambling Act to pave the way for the controversial new wave of casinos, was fatally flawed.

Rejecting the challenge in a written judgment, the judge said: "My conclusion is that each point, whether taken separately or together, fails.

"No basis has been made out before me for challenging the propriety of Paragraph 65 of Schedule 4 to the Transitional Provisions Order of 2006.

"It was properly made, whatever the merits of arguments about its consequences. The claim must fail."

Later, Sports Minister Richard Caborn commented: "I welcome the judgment which has dismissed BCA's case on all grounds and found that our policy was fairly and properly made.

"We have always put social protection and proper regulation above commercial interests and this judgment supports that approach.

"It is only right that the new entitlements granted by the Act should be limited to the 17 new casinos while we take time to assess them properly".

Mr Caborn added: "We will continue to get on with the job of implementing the Gambling Act by September 1 and putting in place significant new safeguards for children and other vulnerable people which it contains."

But the BCA urged the Government to "look again" at its policy in order to secure fair competition between old and new casinos.

Lady Penny Cobham, chairman of the BCA, said: "We welcome the judge's recognition of our concerns about the introduction of the new regulatory regime and the unfairness created ... leading to two tiers of casino.

"It is important to note that the court was concerned purely with process. It was not making a judgment on the merits of the Government's policy of discrimination.

"Our view is that the very substantial competitive advantage granted to the 17 new casinos is disproportionate and will pose a serious threat to long-established British businesses and jobs."

The BCA chairman observed that the entitlements of the existing casino industry were not fixed by Parliament during the passage of the 2005 Act, and it was for the Secretary of State to decide on those entitlements.

She urged the Government "to look again at the provisions so as to secure a better balance between fair competition, consumer choice and protection".

Conservative shadow culture secretary Hugo Swire said it was now time for the Government "to indicate just what they intend to do over the casino fiasco".

He said: "After 10 years of ministers' time, millions of pounds of taxpayers' money, the secretary of state is quoted this weekend as saying, 'I don't think this is the top of anyone's list'.

"Those towns and cities waiting for a decision on the future of their casino bids deserve to know once and for all whether Gordon Brown is going to give them the thumbs up or the thumbs down.

"They should stop playing politics with this legislation."

Critics have raised fears that the new casinos will lead to an increase in gambling addiction.

The locations chosen to have a "large" regional casino are Leeds, Hull, Great Yarmouth, Middlesbrough, Milton Keynes, Southampton, Solihull and Newham, in east London.

Smaller casinos would be in Bath and North East Somerset, Dumfries and Galloway, East Lindsey, Luton, Scarborough, Swansea, Torbay and Wolverhampton.

Liberal Democrats culture spokesman Don Foster said: "The Government may have got off the hook on a legal technicality.

"But this judgment reveals that, while DCMS sought views on the issue, it took little or no account of them."

Today's legal challenge was backed by four companies - Gala Casinos Ltd, Grosvenor Casinos Ltd, London Clubs International Ltd and Stanley Casinos Ltd - which between them operate 116 of the 138 existing casinos in Britain.

The House of Lords voted against plans to open the first 5,000sq m (54,000sq ft) super-casino in Manchester, but the Government says it will press on with its controversial policy.

BCA's concern is that, even though many existing casinos offer the kind of facilities the Government envisaged in the new casinos, including restaurants, entertainment and non-gaming areas, under the terms of the transitional order, many would be required to remove a number of gaming machines from their premises by September 1.

They would then be limited to offering a maximum of 20 limited stake and prize gaming machines from then on.

By contrast, the new small, large and regional casinos would be able to offer 80, 150 and 1,250 machines respectively, plus betting and, in the case of the large and regional casinos, bingo.