Over at the Yorkshire Ranter, Alex, who came within a whisker of absolutely nailing the Prescott/Dome/Casino story
a month a year before anyone else started sniffing around it, has done a bit more digging of his own and turned up another interesting piece of information from a report of the Public Accounts Committee…
10. There are various elements in this scheme which may generate future profits to the taxpayer, but which English Partnerships did not assume when evaluating the deal. For example the extent to which there might be a share in future profits from the Dome Arena and Waterfront is uncertain. Also in 2003 the Anschutz Group expressed interest in placing at the Dome one of the eight large Regional Casinos proposed in the government’s draft Gambling legislation. At the time of Meridian Delta’s original proposals there had been no discussion on casinos. A casino would require both planning permission and a licence under the recently enacted Gambling Act. The Government has indicated that there will only be one Regional Casino, and it is not yet clear whether the Dome will be successful in obtaining a licence. The Department has no firm view about whether a casino would be a positive or negative factor in terms of value to the deal. It is not party to any related negotiations with the Anschutz Entertainment Group, but recognises that Anschutz are pursuing it because they expect it to increase their profits, in which English Partnerships would take a 15% share after the operator had made a prior return. English Partnerships have not however assumed any return from a casino.
And, there folks, is the bottom line in this deal.
Put the super casino in Blackpool, which fancies its chances of becoming the ‘Las Vegas of the North’ then the government’s rake amounts to whatever it gets in licence fees and taxation.
Put the super casino in the Dome complex, and although not straight away, somewhere down the line the government will get not only its licence fees and taxations but an extra 15% of the profits from the operation… and nowhere, as yet, have we considered the likely impact of location on the profitability of such a venture.
I could easily be wrong in this, and find myself corrected by Tim Worstall – but if we ignore the whole Prescott thing for a moment, London starts out with considerable advantages over somewhere like Blackpool in the race for the super casino licence.
If Blackpool has an edge over London in anything it will only really be in terms of land and development costs, which would work out cheaper.
Against that London offer a much large potential market, both in terms of size of population and tourism, much higher income levels, which is likely to translate into higher levels of disposable, which can be spent on gambling, and is certainly much more likely to attract high-rolling wealthy customers, although some may prefer to stick to existing London gaming concerns, which are likely to be rather more discreet.
Overall, you would expect that siting the casino in London would offer the prospect of a much higher overall turnover, higher revenues and, therefore, higher profits, than would be the case in Blackpool, even allowing for the number of visitors to casino whose interest is specifically in gambling.
One might we easily argue that with only one licence up fro grabs, provincial sites are already fighting an uphill battle even before you get around to factoring in the 15% kickback that English Partnerships will accrue somewhere down the line, and as I mentioned previously, because of the way in which the profit sharing deal is structured not only would a casino on the Dome site offer a higher return for English Partnerships in the long run, but by comparison to a development in without a casino, it will also start paying out on that return much sooner than would otherwise have been the case.
And that, is perhaps the most bizarre aspect of this whole situation – unless indirect and on-commercial factors are to play a major role in the decision, e.g. relative impact on local economy against existing need/poverty levels, prospects for stimulating wider regeneration, etc. then the overall package that AEG has to put on the table, thanks to its dealings with English Partnerships over the Dome, looks to be near enough a dead-cert winner of the kind that could be nobbled only by an obviously political rather than purely business decision.
If – hypothetically – Prescott has been got at here and the fix really is in then, figuratively-speaking, that would be equivalent of fixing a one mile race in which not only is your runner the clear favorite but they are also being handed a two furlong head-start over the rest of the field, without any outside interference..
That’s not to suggest that such things cannot and do not happen – the difference between a near certainty and an absolute guaranteed winner is still a massive one when there’s big money on the line, but it could still end up meaning that, in real terms, all this furore has arisen for what amounts to nothing, in real terms.
One thought on “And there’s even more…”
Look at the date on Alex’s first post. Not a month ago. 13 months ago. Way before any of the rest of us were looking into Prescott et al as being corrupt (I wanted Labour to win in 2005, just with a reduced majority, I’m still a socialist FFS).
But still, good coverage all round I think. Are we going to finally break this one?