Analysis - Will the big gamble really be worth it?

Sep 14 2006 By Brian Nicholls, North East Vision

Casinos have been billed as the next big thing in urban regeneration and the North-East has been clamouring to get a slice of the action. But what effect could an upsurge in gambling have on the region? Brian Nicholls looks at the issue.

No need now to watch two flies crawling up a wall; you'll soon be able to bet not only on online poker, bigger-than-ever bingo and the National Lottery, but also in even more casinos, some modelled on Las Vegas lines.

Like fox-hunting and abortion, this gambling rush is divisive both in politics and religion. In the controversy surrounding a wave of more and bigger casinos about to break on Britain, you will find Canon Stephen Taylor of Sunderland for, but Major Mervyn Marshall - a Salvation Army leader in neighbouring South Tyneside - against.

Canon Taylor, as well as a senior churchman, chairs Sunderland Strategic Partnership, driving urban regeneration in Sunderland.

In South Tyneside, two Tories in opposition to the controlling Labour group - like Salvationists - express fears over effects on debt and crime.

Yet many Tory-majority councils are bidding for a casino as eagerly as many Labour-led authorities who, like the Canon, envisage an unprecedented rake-off to create jobs and finance urban development. There are also Labourites opposed.

The Tory leadership sides with caution - and one pilot opening only of a super casino initially (as now agreed), arguing that the Government's more relaxed approach stemmed earlier from inaccurate figures.

Stephen Crow, who chairs the Government's advisory panel on casinos, acknowledges the disappointment of many councils whose applications have failed. Sixty-eight wanted a casino, only 31 were shortlisted.

Newcastle is one of eight being considered for the sole "biggy" on a national trial. It has two candidates. Newcastle United and MGM Mirage want a casino, hotel and conference rooms beside St James's Park, while Mississippi-based Isle of Capri group wants a casino, hotel and convention complex at Pottery Lane, between the Redheugh and King Edward Bridges.

The wary advance a disturbing argument even if they lack an alternative to bolster civic funds. With gambling legalised now in most American states, more people than ever gamble there - in bigger amounts and to greater extremes. Gamblers Anonymous knows of at least 12 million gamblers in the States.

There, the average compulsive's debts exceed $80,000. And as research shows 90% of gamblers have indulged since before the age of 14, many argue that the interests of young people need special consideration.

Local complaints against Middlesbrough's bid for a Las Vegas-type casino in the new Middlehaven district - a bid partly unsuccessful - included one that it would neighbour a new college, tempting students to work or wager there.

Even before the numbered wheels spin more alluringly than ever, the charity GamCare says numbers of people seeking its help have risen 41.3% in a year to 6,563 - a growing proportion of them women.

The Methodist Church, anxious for "robust" monitoring to identify problem gamblers, believes the UK has 300,000 already. GamCare, however, is signing agreements with local authorities to install helplines and face-to-face counselling.

Middlesbrough - excluded from any super casino now - has, even so, impressed by being the first authority to sign up. This could help its alternative bid for a "large" casino.

The anti-casino lobby in the US, where more money is gambled than goes into elementary and secondary education, argues that however much social environments benefit, the poor and disadvantaged are often adversely affected.

A task force found compulsive gambling leads to marital differences, divorces, instances of child abuse and neglect, substance abuse and attempted suicides. Friends and business associates can be dragged into the misery.

While rich and poor alike succumb, US research concludes the poor bet a much larger share of their income, and the less educated gamble more. Joseph Dunn, director of the National Council on Compulsive Gambling in the USA, says it is also likely to exert a dangerous fascination in times of financial uncertainty.

The Government here, however, says regulation and education - not prohibition - will foster responsible gambling. Tessa Jowell, on whom history may bestow a memory that her most significant act as a Culture Secretary was to sanction big-time gambling, thinks the new gaming legislation is "the most protective in the world".

It had better be. American reports, again, found crime in gambling communities nearly double the national average. Operators cited in applications in the North-East have clean reputations, but some older Tynesiders will recall the nightclub-cum-gaming boom of the 1960s for which the area became first renowned.

While councils may see casinos as milch cows for regeneration, they might usefully ponder a statement to the US House of Representatives committee on small business.

It said that for every dollar the US Treasury receives from gambling, three dollars go out in associated social costs - criminal justice, social welfare, etc. Robbing Peter to pay Paul? Some economists suggest entire economies suffer; money that might have been invested, lent and generally recycled usefully finances self-indulgence instead.

Ms Jowell may even be optimistic in hoping UK operators already running internet betting sites offshore will now come ashore and submit to the new Act.

Ross Wilhelm, professor of business economics at Michigan University, calls legalised gambling "one of the worst changes in public policy in recent years".

The Gambling Commission's draft of rules for the UK was published in March, and changes under the Gambling Act 2005 are designed to keep crime out of gambling, ensure it is fair and open, and protective towards children and vulnerable people.

But the rules may be hard to enforce if US experiences replicate. The rules apply not only to casinos but also bingo halls, amusement arcades, lotteries and gaming machines, betting and online gambling.

GamCare says more than 25% of the charity's online message forum are women. In 2000 they represented 2%. More than 6,500 clients took counselling in 2005, a 41.3% jump in a year. Early this year it was 42,600. Has fever gripped already, or is it just that counselling facilities are now better known?

Faith Freestone, a therapist, blames the internet for the greater numbers of women gamblers.

"A woman might never enter a betting shop but will spend hours gambling online," she says.

One online gaming site's revenues have shown a 54% leap in a quarter. Before year's end, players will know where they can visit a new-era casino instead.

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Stakes are high and the play is intense

Newcastle's choice as possible location for a regional casino in the North-East naturally upset some pro-casino campaigners in Sunderland and Middlesbrough.

Newcastle has five casinos already. Sunderland, though a bigger city in terms of population, has only one. A super casino there might have created 2,000 jobs and attracted 2.5 million visitors a year.

However, Andrew Dixon, chief executive of NewcastleGateshead Initiative, reckons Tyneside has lost £20m worth of business in the last three years through lack of a dedicated convention centre, which the development of a super casino would help finance.

Tees Valley Regeneration (TVR) hoped Middlesbrough would get it since, with support from Middlesbrough Council, it could have financed a hotel and conference centre in Middlehaven. A casino already exists in Stockton. "But we have moved on now," says TVR's chief executive Joe Docherty.

"We are very pleased we are still in the running for a large casino."

He said: "We certainly wish Newcastle success. A super casino there would be good for all the North-East."

Damian Aspinall, chief executive of Aspers, which envisaged a "super" Middlehaven venture, says: "We are naturally disappointed. But we will work with friends and partners in the region to establish how best to develop a project, taking advantage of the large licence for which the town has been shortlisted."

Unfortunately, he added, it will not offer the same level of regeneration benefits.

Sunderland, disappointed by total rejection, though South Tyneside is in contention for a small operation, reckons it has lost the chance of £150m in new investment. Las Vegas Sands, Sun International and Aspinalls had all considered a site beside the Stadium of Light, to benefit Monkwearmouth. Canon Taylor says: "I sincerely hope we haven't lost out altogether.

There may yet be a gap our bid could fill."

Perhaps Newcastle's greater experience of controlling casinos won the day. North East Chamber of Commerce chairman Maggie Pavlou says: "Chamber members across the region have recognised the economic benefits of a super casino. While it is disappointing for Sunderland and Middlesbrough, the NECC is glad the North-East hasn't missed out completely."

Less enthusiastic, maybe, will be owners of bingo halls, amusement arcades, betting shops and existing casinos facing the extra competition.