Town halls cash in on casino kickbacks

by PAUL EASTHAM, Daily Mail

Last updated at 09:08 19 October 2004

Town halls are being handed millions of pounds in return for approving applications for Las Vegas-style super casinos. The revelations come as the Government prepares to unveil controversial plans to sweep away most of the restrictions on gambling

Councils are being encouraged by the Government to demand so-called planning gain in the form of valuable facilities in exchange for rubber-stamping the enormously profitable gambling centres.

Under the deals, known as Section 106 agreements, developers are told to build council flats, theatres, conference facilities and other spin-offs such as restaurants. Otherwise, they are warned, the deal may not go through.

The news flies in the face of assurances from the Culture Secretary, Tessa Jowell, that councils would scrutinise applications rigorously and approve them only if they are in the interests of residents.

Critics last night said it seemed wholly inappropriate for local councils to be acting as judge and jury over the planning applications while at the same time effectively demanding a bribe to say yes.

The controversy comes as the Government today publishes the long-awaited Gambling Bill which will pave the way for super casinos. The truth is that the Government has been actively encouraging councils to ask for financial benefits in return for rubber-stamping applications. The legislation goes so far as to portray casino development as 'an engine of regional regeneration'.

Council 'asking for profits share'

Last night, there were reports that Manchester City Council was taking the agreement a step further by asking potential casino operators for a share of their profits.

The Times reported that the council wants casino bosses to confirm in advance how much money they will hand over each year.

Caesars Entertainment is understood to have offered the council two per cent of its planned casino's 'gaming gross revenue' in return for planning permission, said The Times.

The company is said to have also guaranteed that the annual fee would not fall below £1million a year and promised £3million up front to local businesses.

The council is said to have rejected these offers and chosen Kerzner International, the owner of Sands in Las Vegas. The company will build a £260million centre including hotel, ice rink and swimming pool with artificial beach.

There are no details of any benefits to the local authority from that deal.

Meanwhile, Caesars has won permission to build a complex at Wembley. Again there are no details available of the deal.

Investment in housing

Yvette Cooper, a junior minister in Mr Prescott's department, told MPs examining the new laws "it was very standard practice" to insist the developers incorporate effective kickbacks for the local councils in their casino schemes.

She told them such deals "would require investment in affordable housing, perhaps, or new community facilities and things like that as part of the agreement for getting planning permission on a particular site".

Casino developments will be expected to include 'free' facilities such as theatres, restaurants and conference rooms.

Miss Cooper said she envisaged one casino development currently being looked at to include a 700-seat theatre as part of the agreement to develop the property.

The council gains to the tune of millions of pounds because it means that it does not have to build the theatre at the cost of putting up the council tax.

The astonishing scale of the proposed new generation of 'regional casinos' was revealed yesterday.

Stanley Leisure, Britain's biggest casino operator, announced plans to open a massive complex in Leeds within three years.

The casino, offering £1million slot-machine prizes, would be built next to Leeds United's Elland Road stadium at a cost of up to £125million.

Liverpool-based Stanley Leisure has paid £5 million for a subsidiary company owned by the debt-ridden football club, whose only asset is the seven-acre site.

The centrepiece of the complex would be a 150,000 sq ft casino, complete with 40 gaming tables, 1,250 slot machines, restaurants, bars, 'private gaming rooms' and nightly cabaret entertainment.