Council sees off JR challenge over casino licence award

The London Borough of Newham is understood to have successfully fended off judicial review challenges over its award of a casino licence, after the unsuccessful bidders withdrew their claims shortly before an oral permission hearing due to take place today (28 July).

Newham was one of eight authorities given the right to award a large casino licence. These licences allow bettting and bingo to be offered alongside casino gambling, together with up to 150 Category B1 jackpot gaming machines.

Five operators had entered the council's competition, with three – Aspers, Great Eastern Quays and a consortium made up of Apollo Resorts and Leisure and Genting – making it past the regulatory stage.

Newham awarded the licence to Aspers in March this year, but its choice was challenged by the other two bidders.

The Gambling Act 2005 requires the winner at stage 2 of the selection process to be the party whose application, if granted, is likely to result in the greatest benefit to the area of the authority. The offer of benefits may be supported by a legal agreement under Schedule 9 of the Act.

Newham Council set up an Evaluation Framework which awarded scores under five lead criteria: ability and commitment to deliver the scheme; job creation and regeneration; financial offers; the creation of a sustainable leisure destination; and prevention, monitoring and safeguards.

Half of the available marks went on the first criterion, deliverability. However, if a scheme was not judged to be excellent in this aspect then no marks would be awarded.

Before making its decision, the council's licensing committee received reports from an advisory panel – chaired by retired Court of Appeal judge Sir Henry Brooke and tasked with carrying out preliminary evaluations of the proposals – and an expert technical panel.

Great Eastern Quays and the Apollo/Genting consortium both scored zero on the deliverability criterion, having not received an 'excellent' rating. This helped pave the way for Aspers to win.

The two bidders then challenged the council’s decision on a number of grounds. These included an argument that the council’s requirement for excellence on deliverability was inconsistent with the test of “likelihood” of benefit in the 2005 Act, and that Newham had applied a more stringent test of certainty or near certainty rather than excellence.

Newham, advised by Philip Kolvin QC of 2-3 Gray’s Inn Square, argued that it had set its criteria in 2010 in accordance with regulations made under the 2005 Act and so it was too late to challenge them. The local authority insisted that it had faithfully applied the criteria in coming to its decision.

Great Eastern Quays and Apollo/Genting also claimed that the council had wrongly taken into account the absence of planning permission for their schemes when s.210 of the 2005 Act prevents an authority taking into account the likelihood of planning consent.

Newham argued that it had not assessed the likelihood of planning consent, and that the 2005 Act does not prevent an authority taking into account the fact that there was no planning consent. It said that in this case that fact was material to whether the claimants could show funding and therefore deliverability of their schemes.

Mr Justice Mitting refused the application for judicial review on the papers. The judge said it was too late to challenge Newham’s Evaluation Framework and that Newham had properly applied the test set out in it. He also said Newham could assign significant importance to deliverability, “in homely parlance, to prefer the bird in the hand to two or more in the bush”.

Great Eastern Quays and Apollo/Genting renewed their application for judicial review, but have both discontinued their claims before the oral permission hearing.

In its application Aspers offered:

• an immediate cash payment of £5m for good causes in Newham
• the greater of £1m per year or a 3% share of the casinos gaming revenues with the possibility of a further 2% share in certain circumstances;
• the commitment to employ at least 300 people; and
• a further £100,000 per annum for local charities.

Aspers will also pay £50,000 each year to Newham Workplace to maximize local employment opportunities. The casino – in the Stratford City Westfield shopping centre – is expected to open in October.

In a statement City & Eastern, the company behind the Great Eastern Quays bid, confirmed it had withdrawn from its legal challenge.

The company said: “The decision was made reluctantly, as C&E still firmly believe that Newham has wasted an opportunity for additional regeneration and income for the Borough. However, it was felt that the time and costs required to pursue the legal challenge through the judicial review process, would be better invested elsewhere. The company will now concentrate its efforts in securing the casino licence in Bath and other UK centres.”

Philip Hoult