Birmingham places big bet on success of casino complex

 

Genting, the Malaysian leisure industries company, has spent £150m on a building at Birmingham’s National Exhibition Centre that will comprise a hotel, conference centre, multi­screen cinema and gaming room able to accommodate 2,000 gamblers.

Paul Thandi, the chief executive of NEC, Genting’s landlord, says with just a touch of hyperbole, that the development will put Birmingham “up there” with the world’s big gambling hotspots of Las Vegas, Macau and Miami.

Peter Brooks, president of Genting UK, is more cautious, describing the project as an “experiment” and “an act of faith”.

But the Birmingham project has been frustrating. Mr Brooks candidly admits the company — it runs about 40 casinos across the UK including Crockfords in central London — would not have embarked on the investment if it had known about the regulatory difficulties and planning delays.

It has some harsh words for UK legislators.

“Under the legislation, we can have just 150 slot machines. This is a complete joke by the standards of any other nation that permits gambling,” Mr Brooks says. “In our development in Vegas, there are 3,000 machines. In Resorts World New York, 4,000 and Rotterdam 7­00 to 800 slot machines.”

“It’s an example of why it’s so difficult to have casino­-based investment in the UK. It’s a huge missed opportunity. But it’s politically controversial and everyone has their heads in the sand.”

Mr Brooks says the highly restrictive gambling laws are a direct result of public concerns about addictive gambling and particularly the role of fixed odds betting terminals that can be found in most UK bookmakers.

Resorts World Birmingham is defined under the 2005 Gambling Act as a large casino and was one of just eight licences awarded. Only two large casinos have since opened, both operated by Aspers, a joint venture between the Aspinall family and Crown, the Australian casino operator.

Under the act, there were also eight licences given out for small casinos but none has opened.

“We’re not happy about the delays. We signed up in 2008 and here we are in 2015 and we’re only just about to open,” Mr Brooks says.

Genting anticipated legislation would be relaxed, and gaming tax reduced. In fact, tax rates were increased, with casinos now charged up to 50 per cent tax on their gross profits depending on turnover.

“We were probably unduly optimistic, I hate to use the word naive. But the government can’t on the one hand say they want to stimulate investment and create jobs and on the other create an environment where it’s almost impossible to make a profit,” he says.

For all that, the project could have a big impact on the Midlands economy.

Most casinos in the UK are in urban areas. Resorts World Birmingham sits next to the NEC’s range of featureless exhibition halls that put on everything from rock concerts to the Crufts dog show and the Horse of the Year competition.

Exhibitions and shows at the NEC attract 3m visitors a year and Mr Brooks forecasts the Genting development could attract a further 1.5m to 2m people.

Although out of town, the site has the advantage of being close to the UK motorway network, has a mainline railway station and will be on the route of the planned HS2 high-speed rail link with London. It is also close to Birmingham International airport.

“That connectivity is critical. We don’t have any passing footfall other than what happens on the campus itself. I think the existing rail network is going to be more important than HS2, because most of the people won’t be incurring the cost of travelling that distance.”

Mr Brooks is reluctant to predict how profitable the casino will be. “There is an experimental element in all this. This is an act of faith which we believe in strongly. But this is a unique destination. There is nothing like it in UK or even in Europe.”