Ladbrokes ends casino plans
Ladbrokes, the leading UK bookmaker, has ditched plans to break into the UK casino market in a blow for government plans to issue 16 new casino licences to local authorities.
James Purnell, culture secretary, is expected to announce in the next few weeks the formal burial of the proposed super-casino in Manchester. But he will give the go-ahead for the eight large and eight small casinos that remain from the wreckage of the government's much-derided casino expansion policy.
Ladbrokes, however, will not be among the bidders to run them. "We have conducted a review of our casino strategy and have decided to withdraw from the process due to the length of time it would take to generate sufficient return on the capital spend required," it said.
Ladbrokes' decision raises doubts about whether any of the leading gaming operators will bid for the casinos. The increase in casino duty in last year's budget, the smoking ban and the removal of lucrative gaming machines, as required under the Gaming Act, have left casino operators nursing damaged businesses.
Though much smaller than the defunctsupercasino, the licences for the 16 new venues attracteda flurry of bids from local authorities because of the potential for economic regeneration.
But the prospect of not even these casinos getting off the ground would be the final humiliation for a policy that envisaged 40 supercasinos in the UK. The plan was embroiled in controversy over alleged ministerial links to US operators and prompted a morality backlash.
Ladbrokes had in recent years worked on a strategy for getting back into casinos.
Two years ago, it opened a casino in the Paddington Hilton hotel and was not only behind Blackpool's failed bid for the supercasino but was laying out plans to bid for eight of the new casino licences. Its decision to abandon the strategy effectively kills off talk of Ladbrokes as a suitor for Rank Group, the embattled casino and bingo operator that has seen revenues plunge.
Gala Coral, which has 30 casinos, 26 of which it bought from Ladbrokes in 2000, and a market share of 24 per cent, said it was "keeping our options open" about bidding for any of the16 casinos.
The UK bingo market was shaken up in 2006 when Harrah's, the Las Vegas-based gaming operator, paid £279m for London Clubs International, swiftly followed by Genting, the Malaysian gaming operator, buying Stanley Leisure.
Written by Roger Blitz, Leisure Industries Correspondent
