For all the moral indignation over the government's decision to allow a number of new casinos, the assumption among opponents and supporters alike is that casinos do indeed create jobs and help to regenerate run-down areas. That was certainly what many people in Manchester said when it won the right to establish the country's first "supercasino." But the benefits may not be quite so clear.
According to the department for culture, media and sport, about 140 casinos are already operating in Britain, and gambling is growing rapidly—a fact the culture secretary Tessa Jowell cited as a reason for licensing more. The Casino Advisory Panel (CAP), the body which vetted the new applications for Jowell, recommended establishing eight large and eight small casinos, in addition to the coveted supercasino. According to the most recent figures (2003-04), the industry employs 96,000 people and about £50bn is gambled every year.
But in Manchester's case, we are in uncharted territory. As Max Nathan of the Centre for Cities puts it: "We've never done anything like this before." The supercasino, which the government says is a pilot, is different in two main respects: it is bigger than any other in Britain, and it is explicitly intended to kickstart the regeneration of east Manchester. Partly for this reason, there is no agreed methodology for estimating the benefits—which led to some testy exchanges between consultants hired by Manchester and competitors such as Blackpool.
The supercasino is certainly big by British standards. It will have a minimum "customer area" of 5,000m2 and be allowed up to 1,250 gaming machines spewing out unlimited jackpots, expected in practice to be £100,000 at the most. A mere "large" casino, by contrast, will have a minimum customer area of 1,500 m2 and be permitted no more than 150 machines with a top win of £4,000.
Demonstrating local economic benefits was a key criterion laid down by the CAP for assessing applications. So, dazzled by the bright lights of what was on offer, bidders for the supercasino licence played up the scale of job creation. Despite their differing circumstances, Glasgow and Greenwich, for example, came up with suspiciously similar estimates of 2,000 jobs. Not to be out done, Manchester's submission pitched in with 2,771 jobs.
This number deserves scrutiny. First, it is full-time equivalents (FTEs)—in other words, an unspecified number of the jobs will be part-time. Second, 520 of the total are construction jobs or jobs associated with local purchases for construction. These will presumably be temporary. Third, the number of FTEs actually required for operating the casino is put at 1,300. Fourth, the remaining 951 jobs—a third of the total—are spin-offs in places such as hotels, conference centres and leisure facilities in the Sportcity development that includes the casino.
Interestingly, this 951 total includes some curiously precise figures, ranging from 11 jobs created by "synergies with other Sportcity facilities" to 205 jobs ascribed to "multiplier effects." As Nathan points out, the multiplier effect is very uncertain. While an investor such as Sol Kerzner, the South African gambling magnate who is the favourite to operate Manchester's casino, knows how many workers his casino needs, estimating the number of jobs created outside the casino is more of an art form.
Does it, for example, take account of the net effect on Manchester's existing six casinos or other hotels, conference and leisure facilities? How much does it depend on estimates of the market for gambling? Manchester's submission to the CAP made much of the size and wealth of the population of the northwest. About 1.5m potential punters are estimated to live within an hour's drive of the casino and it is hoped they will be joined by armies of visitors and tourists. Manchester's calculation that the casino will account for £96m of gross value added a year—10 per cent of present revenues from tourism—depends heavily on these assumptions.
Nobody has more at stake than the people of east Manchester, one of the most deprived parts of the country, and the casino is pivotal to the strategy of New East Manchester (NEM), the agency responsible for the area's regeneration. NEM envisages raising the area's population from 60,000 to 90,000, creating 10,000 new jobs in the process. More than a fifth of these new jobs are supposed to come from the casino.
Ta-ta to British engineering?
As Tata, the giant Indian conglomerate, buys Corus, which includes what is left of the old British Steel, John Rose, chief executive of Rolls Royce, is asking that old question again: are we content to see foreigners acquire the last remnants of British manufacturing? And more to the point: is control from foreign headquarters further discouraging British students from studying engineering? Rose seems to think so. Rolls Royce is one of the most successful British engineering companies. But even Rolls Royce struggles to find the technological and engineering skills it needs in Britain.
