Labour retreat over super-casinos

MASSIVE opposition has forced a rethink of Tony Blair's planned gambling free-for-all, it emerged last night. Tessa Jowell, who proposed the proliferation of Las Vegasstyle casinos across Britain just a week ago, suddenly promised there would be no more than '20 to 40'.

The Culture Secretary also hinted at further concessions when her Gambling Bill has its second reading a week today.

Her extraordinary climbdown came after three Cabinet heavyweights - Deputy Premier John Prescott, Chancellor Gordon Brown and Home Secretary David Blunkett - signalled their unease at the plans.

They acted amid a growing campaign of opposition led by the Daily Mail and featuring MPs from all sides, experts on gambling addiction, church leaders and many in the industry itself.

The plans were also at the centre of an astonishing Cabinet wrangle last night after a US casino boss claimed that unnamed government officials had promised him he would have to pay less than half the current rate of gambling tax if he invested here.

Gordon Brown, who would be in line for an extra £3bn a year in gambling duty at the normal rate, was apparently not consulted.

Sources at the Treasury tried to play down the dramatic claim, but it is likely to fuel Mr Brown's concern about the plans. He has already demanded that Miss Jowell provide a wide range of facts and figures on the impact of the super casinos. A senior Treasury spokesman said last night: 'It is not clear who has made this offer. But tax policy is a matter for the Treasury.'

Mr Prescott, who will have the power to block casino developments on planning grounds, is also advising caution over the casino plans.

He has expressed doubts that the much-touted 'redevelopment benefits' would outweigh the social damage.

Friends of Mr Blunkett said the Home Secretary was worried about both the proposal and the way it has been handled.

Labour backbenchers and activists are horrified at the prospect of huge US gambling houses sucking cash out of the pockets of badly-off families and sending it back to America.

They are deeply sceptical about Miss Jowell's claim that the spin-off benefits promised to local communities will outweigh the social damage, including the creation of many thousands more gambling addicts.

The Culture Secretary tried to hit back by bizarrely branding her opponents 'snobs' in a newspaper interview, but she knows the action by such a trio of top Ministers is unprecedented.

Mr Blunkett is said to have kept his concerns private because he is already busy tackling illegal immigration, gun crime and the yob culture and does not want to be seen to be leading a charge against Miss Jowell.

One Whitehall source said: 'David's concern is that if you look back to the years before casinos were regulated, they were the centre of much of our organised crime. They are an absolutely brilliant way of laundering illegal money from drugs and other rackets.'

The source said there were also important concerns about drunken gamblers emerging into city streets at all hours of the night, causing disturbances and, potentially, violence.

A Culture Department spokesman denied a full-scale Cabinet revolt was under way and insisted the whole Government had 'bought into' the proposals.

He said claims that the legislation could lead to hundreds of super casinos were overblown. But, in a sign that the pressure is beginning to tell, he made it clear Miss Jowell may set an upper limit.

'Our estimates are between 20 and 40 more, full stop,' he said, adding that the Bill contained measures to give local communities a say in blocking casinos.

Miss Jowell herself suggested in a newspaper interview that elitism and anti-American sentiment were the true motives of some campaigners against the Gambling Bill.

She said: 'There's a whiff of snobbery in some of the opposition to new casinos: people who think they should remain the preserve of the rich; others that find them gaudy and in poor taste; others that don't want the big investment that will come from the United States.

'They are entitled to those views but they are not entitled to force them on others.

'Just because I don't choose to go to a casino for a night out doesn't mean that other people should not be able to.

'New casinos could bring in around £5bn of new investment in the first five years. I don't care if this investment comes by way of the dollar, the euro or the yen. I suspect that the 80,000 people set to get new jobs won't care either.

'The fact is that regional casinos will bring real jobs, real investment into real areas.'

She acknowledged that some believed gambling to be wrong but said the majority were 'morally ambivalent'.

Amazingly, Miss Jowell also insisted: 'Gambling per se is not compulsive. We have the lowest rates of problem gambling in the world.'

The Culture Secretary, interviewed in the Sunday Telegraph, said there were already 127 casinos in England and the idea that 'super casinos' would be 'dropping from the skies on unsuspecting communities who will be powerless to resist them' was nonsense.

'They will be located only where people want them,' she said.

Challenged over Miss Jowell's claims, her officials were unable to name anyone with 'snobbish' views. A spokesman said: 'We are not pointing at anybody in particular. The Secretary of State is saying there are cases where people's opposition is not based on a rational look at the policy.'

Gambling was illegal in Britain until the 1961 Betting and Gaming Act, which allowed thousands of bookmakers and casinos to open.

But the legislation was badly worded and many gangsters, including the Krays, moved into the market, using casinos as a front for crime and money laundering. The loopholes were not closed until 1970.