Aggrieved bidders challenge Newham over casino licence award

The London Borough of Newham faces legal challenges from both unsuccessful bidders over its award of a large casino licence in March.

Great Eastern Quays Casino (GEQC) and Apollo Genting separately launched judicial review proceedings last month after the council handed the licence to rival Aspers, which will base the casino in the Stratford City Westfield shopping centre.

The cases are likely to be closely watched by other local authorities and casino operators involved in the award of the 13 remaining large casino licences across the country.

Fergus Kinloch, Director of City & Eastern, the developer of the site which incorporated GEQC’s proposed casino, argued that Newham’s decision went against the Gambling Act 2005’s provisions in relation to regeneration.

He said: “The judicial review process has formally been launched as we firmly believe that Newham Council failed to comply with the proper processes relating to the bid and that regeneration, which by law should lie at the very heart of any successful casino bid, quite simply appears not to have been taken into account, or worse, swept under the carpet, by Newham Council when deciding on which bid to select.

Kinloch claimed: “It is now clear to us that any proposal that was genuinely regenerative never stood a chance of winning the competition.”

He also argued that the guaranteed community benefits offered to Newham by Aspers were more than £37m less than those offered by City & Eastern. The GEQC plan would have created 1,200 full-time jobs, he added, three times the amount of the winning bid.

Accusing the local authority of “short changing” the people of the borough, Kinloch said: “Newham Council has in our view needlessly turned away over £250m of investment plus substantial financial benefits for local residents, and at a time when councils are having to make major spending cuts.”

The City & Eastern director also criticised the council for running what he claimed was a “closed door policy” in the running of the bidding process, and urged Newham to provide a clear and detailed explanation of why it chose Aspers.

Apollo Genting has put forward similar arguments as to why Newham’s decision should be declared unlawful and set aside. In its statement of grounds, it said that the council had failed through its application of the evaluation framework to apply the greatest benefit test set out in Schedule 9(5)(3)(a) of the 2005 Act “contrary to the legislator’s intention and the authority’s own statements as to what it required”.

The company also argued in its statement of grounds that Newham had:

• applied evaluation criteria differing in substance from those described in the evaluation framework or which might reasonably have been understood from the evaluation framework by those deciding to submit and preparing and submitting bids
• failed to provide to provide any, or any adequate reasons, for its scoring in relation to deliverability, and/or had made manifest errors of assessment in relation to the scoring of that criterion, and
• failed to comply with the principle of equal treatment and/or provide, any or any adequate reasons, for its scoring of the successful application and/or committed manifest errors in relation to its scoring of the successful application.

Apollo Genting managing director Mike Nuttall told Local Government Lawyer: “Our view is that the Gambling Act and the local authority’s own guidelines, principles and process make it abundantly clear that the licence is awarded to the party delivering the greatest benefit to the authority’s area.

“Newham was chosen as the only authority in London to have one of these casinos. The government body at the time – the Casino Advisory Panel – clearly stated at the time that Newham was chosen because it would be the single greatest test of the positive impact on social deprivation, and yet a licence has been awarded to a party offering between one quarter or one fifth of what the other bidders were doing today.”

A Newham Council spokesman said: "The Council's decision-making process to award the casino licence was robust and fair. We are aware of the legal challenges and are confident that all aspects of the process will stand up to scrutiny."

Philip Hoult