A FORMER Downing Street adviser lobbied the government to relax gambling laws and pave the way for valuable casino contracts on behalf of Kerry Packer, the Australian billionaire, newly released Whitehall documents have disclosed.

Michael Stephenson, Tony Blair’s former political secretary, is the London representative for a firm of lobbyists which is employed by Consolidated Press Holdings (CPH), Packer’s private investment vehicle.

The documents show that the lobbying firm set up meetings between CPH and officials at the Treasury and the culture department responsible for drawing up new gambling laws.

A government minister and MPs charged with scrutinising the new laws also travelled to Australia to visit Packer’s casinos. The magnate has now secured preliminary agreements to build several new casinos in Britain.

The documents, released under the Freedom of Information Act, also show that CPH discussed with Treasury officials the “damaging social consequences” of deregulation in Australia. However the company pointed out that it brought wider benefits to society by significantly boosting tax revenues.

Despite opposition, ministers subsequently decided to push ahead with deregulation in Britain — where gambling is a £60 billion-a-year industry. The Gambling Act passed this year will allow new casinos across the country. The first are expected to open in 2007.

The documents consist of minutes of meetings held with international casino operators and representations received about changes to the gambling laws. They are likely to add to concerns about the influence that wealthy foreign casino operators had on the new laws.

They show that CPH met Treasury and culture department officials working on the legislation on June 18 and July 14, 2004.

The minute of the June meeting records: “They (CPH’s representatives) pointed out that the deregulation of gambling (in Australia) had occurred during a period of economic recession and had been driven primarily by the need to raise tax revenues. During the early to mid- 1990s this led to the establishment of urban casinos and an explosion in the number of (slot) machines sited in population centres.

“This has had damaging social consequences but gaming now contributes such a significant percentage of state revenues that government cannot easily curtail the availability of gambling.”

The meetings were arranged through Hawker Britton, a firm of political lobbyists Stephenson is its London director. Its website promotes the political connections of Stephenson, who left Downing Street in 2001 after several years: “As a senior No 10 adviser, Michael developed a unique understanding of the British government and has an extensive knowledge of Whitehall . . . He is ideally placed to advise business.”

CPH also provided a study on British casinos for the tax authorities. This is believed to have included estimates of the tax that the chancellor could raise through deregulation. The government has refused to disclose this document on the grounds that it was “used in the formulation of policy”.

The meetings in London are thought to represent the final stages of extensive lobbying by Packer. The Australian media tycoon, whose fortune is estimated at £2.8 billion, is reportedly planning 16 British casinos costing more than £500m in conjunction with Damian Aspinall, who already owns a gambling club in London.

Their joint venture, Aspers, recently won a contract to build a casino in Cardiff, subject to the granting of a licence, which will cost an estimated £150m-£200m. Other projected Packer locations include Newcastle, Swansea and the West Midlands.

It is understood that CPH first attempted to influence the formulation of the new gambling law in 2002 when Richard Caborn, minister of state in the culture department, visited Australia to study deregulation. He is understood to have visited the Crown in Melbourne, Australia’s biggest casino, which is operated by Packer.

In the following year the government published a draft of the new gambling law, which deregulates Britain’s gaming industry and allows an increase in the number of casinos as well as relaxing membership regulations. A parliamentary scrutiny committee was established to study the then proposed laws.

Caborn recommended that the scrutiny committee also travel to Australia. In February 2004, two members visited Packer casinos, as well as other firms and organisations.

The committee later backed the broad thrust of the government’s recommendations despite concerns from churches, charities and opposition parties about the social consequences of deregulation.

Opponents of the law criticised the scrutiny committee, claiming that 14 of the 16 members had links to the betting industry. There were allegations that key officials became too close to casino companies during a trip to Las Vegas last autumn. Gideon Hoffman, a senior official, subsequently applied for a job in the gambling industry.

After a public outcry over the new legislation, the government was forced to cap the number of new casinos. Only one massive “regional” casino with 5,000 square metres of floor space and unlimited jackpot fruit machines will now be built. There will also be eight large casinos, each of 1,500 square metres, and eight of 750 square metres. An independent panel has been established to recommend suitable locations.

The Department for Culture, Media and Sport said: “We learnt very important lessons from Australia on exactly how not to deregulate the industry, which was borne out in the tough controls laid out in the Gambling Act. We met people from all sides of the debate and nobody was given preferential access or influence.”

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