How the Government's giant bet on gambling reform can end up a winner

In Melbourne, the casino has revived a rather down-at-heel quay as well as bringing a lot of business to the city

So, we are going to gamble by Aussie rules. Well, not exactly, but Britain seems set to follow the path beaten by Australia in liberalising gambling, with local authorities being encouraged to give planning permission for mega-casinos.

So, we are going to gamble by Aussie rules. Well, not exactly, but Britain seems set to follow the path beaten by Australia in liberalising gambling, with local authorities being encouraged to give planning permission for mega-casinos.

Australia has been the first developed country to give general support to the idea that large casinos could be located more or less anywhere. In the United States, they are limited to a few states, most notably Nevada, or to Native-American territories outside of state law. In much of continental Europe, casinos are limited to a handful of top-of-the-market locations.

Under the new British legislation, just published, casinos will be allowed to be open for 24 hours a day, including Good Friday and Christmas, and people will be able to go in without a 24-hour joining period. Casinos will also be allowed to advertise for the first time. Safeguards will be put in place, including compulsory age checks. There will also be a new industry regulator, controls on internet gambling, more research into gambling addiction and so on. The legislation is being presented by Tessa Jowell as "new protections, not new casinos" and the Culture Secretary hopes to make Britain "the safest gambling environment in the world".

Understandably perhaps, not everyone agrees. The Salvation Army has attacked the plans, arguing that the big losers will be the people who are ruined by gambling addiction, and Frank Field, the wise Labour MP, has warned that, once the law is through, there will be no turning back.

It is undoubtedly true that there will be more gambling in Britain as a result of the legislation. The whole point of liberalising the terms under which casinos can be built is to build more of them. The idea is that money generated will help revive run-down city centres, both by attracting more visitors and more explicitly by forcing casino-owners to build other facilities - low-cost housing and the like. If there were no splurge of new casinos then the legislation would not achieve its objective. But there will be.

So what should we think? There are two completely different ways of discussing this sort of legislation. You can have a philosophical debate about liberty and the rights of the individual, the proper role of the state in trying to shape human behaviour (or curb human desires), the balance between the adverse social consequences for people who become addicted and the gains to human welfare for those who have a good time.

Or you can see what happens in Australia. The news from there is good and bad. Let me give you the good news first. I would not consider myself a keen gambler, indeed not one at all, and have only been to the casinos in Adelaide and Melbourne, which are pretty much top of the range. But the casinos in both those cities are extraordinarily impressive.

In Adelaide, the casino is the city's former railway station, now part of a hotel and conference complex - impressive sandstone pillars and marble floors on the way in and rather more standard mass-market casino décor inside. It looks nice, but when I was last there a year or two ago, not a lot was going on.

Melbourne's casino is even glitzier. It is the largest in Australia, newish (it opened in 1997), huge (bigger that the parliament building in Canberra) and undoubtedly in-yer-face. It is on the banks of the Yarra river, has a five-star, 39-storey hotel above and announces its presence to the world with vast gas flares that shoot up into the sky every few seconds. I'm afraid quite a few pigeons were barbecued in the early weeks until they figured out that this was not a good place to hang around. Still, the casino gives staid, prissy Melbourne a brassy, louche front to the world. Yer wanna have fun? Yer come te the right place.

Inside, you feel as though you are in a grand ocean liner. The gaming halls go on and on, the sounds muffled by the thickest carpets you could imagine. As I recall the different stake levels used a system of coding on the various tables. A clear hierarchy of style was certainly evident, from roulette at the top to one-armed bandits at the bottom. The flush or would-be flush were on roulette, the sadder characters shuffling around the long rows of fruit machines.

But - and this is the key point - in their own terms these casinos have been a grand success. In the case of Melbourne in particular the casino has revived a down-at-heel quay as well as brought a lot of overseas business to the city. We can expect to get similar palaces to pleasure in Britain. They will look wonderful; they will indeed revive down-at-heel bits of cities; and they will give a lot of people a lot of enjoyment.

Now the bad news. Gambling has surged since the 1990s and, unsurprisingly, problem gambling has also risen. A few high-profile stories have circulated about gamblers who have lost millions, stolen money to try to cover their tracks and so on. And, of course, there is also the much larger number of lower-profile stories about wrecked marriages, suicides and attempted suicides, and rising vagrancy.

Now you have to be careful when trying to pin down the reasons for grand social trends. The links between, for example, disorder associated with drunkenness and total consumption of alcohol are not very direct. For example, here in Britain we have suffered from quite a sharp increase in public disorder but, while overall levels of alcohol consumed have risen, they have not risen by very much. In contrast to increasing problems of public order, one particularly grave effect of alcohol - drunken driving - has fallen sharply. That has been one of the most successful examples of using a mixture of publicity and the law to tackle a social problem - and, of course, much more can and should be done.

So the trick, if we are to make gambling easier and indeed nicer, is for society to lean against its destructive aspects and lean towards its pleasurable ones.

Lots of experience of this has been gained around the world. Las Vegas is wonderfully successful as a family-holiday destination, the epicentre of a giant leisure industry. The Hong Kong Jockey Club, which runs racing in Hong Kong, is probably the most successful not-for-profit gambling organisation in the world. Our own National Lottery is the world's largest and as such the world's most successful. Some people would hate to have a holiday in Vegas; others never go to the races; and some of us think betting on the lottery is nuts. But if some people would rather spend an evening gambling in a casino than getting drunk in a pub, who are we to say they are wrong?

Indeed, if the new casinos create shiny, stylish places in cities where people can enjoy themselves, they will have to be orderly and well-run to satisfy the authorities. They will have to be enticing, offering good value, to satisfy the punters. And they will have to be profitable or they won't last. All we have to do now is train people to understand that they will, over time, inevitably and inexorably lose money - just as I did with my embarrassingly modest stakes last time I was in Australia.