UK casinos raise stakes in gambling reform battle

Britain's controversial casino reform bill heads to Parliament's upper house this week amid frantic lobbying by casino firms who are consulting lawyers claiming the proposed bill is anti-competitive.

For the first time tomorrow, the House of Lords will consider the bill, which analysts and British firms say favours foreign corporations who have earmarked up to $5 billion for building UK casinos.

British firms say their existing 137 small, members-only casinos will become redundant once new larger casinos roll out with more machines and higher prizes.

The draft gambling bill, which would regulate internet gambling and allow new Las Vegas-style super-casinos, has also angered anti-addiction campaigners and newspaper commentators.

The British Casino Association says if the bill passes through parliament unchanged, many of its members might seek redress from European Union competition authorities.

"I'm absolutely 100 per cent certain some of our members would go to court," chairman Penny Cobham told Reuters. "Legal advisers have told some of our members they would have a very good case with EU competition bodies."

A spokesman for the Department for Culture, Media and Sport, which has produced the bill, said: "We believe what we are doing meets all European rules on competition."

Last month, privately owned Gala was forced to scrap a joint venture with US operator Harrah's Entertainment as a result of changes to the bill at a cost of around £1.5 million each.

"As it stands, this bill is extremely damaging to the existing casino industry, because it is discriminatory and anti-competitive," Chief Executive Neil Goulden told Reuters.

The scenario existing players most fear is one of the new casinos, which are licensed for more machines with higher prizes, setting up alongside one of their own smaller, more restricted venues.

"There are one or two casinos opening right now that if the bill is passed unchanged will become white elephants overnight," said Ms Cobham.

"They will have a limit of 10 of the £2,000-prize machines, but then someone could open up down the road with 80-150 of them, plus a host of other attractions," she added.

But the government denies the draft bill favours foreign investors, and says its main priority is preventing a rise in gambling addiction.

"The Gambling Bill is not about favouring one faction over another," said the Department for Culture, Media and Sport.

"It is about protecting the public against new risks, and we make no apology for that."

It said existing players were free to apply for any of the 24 new casino licenses that will be on offer once the bill is passed - eight licenses for small casinos, eight for large and eight for the Las-Vegas style super-casinos.

But the industry says the government is being naive. "If you were a council awarding these licenses, you are going to want the new investment, the new infrastructure and the new employment that a new casino project would bring," said Ms Cobham.

"Why would you possibly want to award a licence to something that's already there?"

The industry is now lobbying hard for limits on their existing 2,000-pound-prize machines to be relaxed so they can compete on a more even basis with the expected influx of new rivals.

"All we're asking for is the limit of 10 to be relaxed to say 20 or 25," said Gala's Mr Goulden.

Other operators are lobbying for larger numbers of machines to put them on par with the newcomers - 80 in a "small" casino and 150 in a "large" casino - effectively granting them an automatic new licence.