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UK
Casino Times
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News
07 February
2005
LCI Hit By Government's
'Humiliating Retreat'
Shares
in casino operators nose dived following the government's
controversial plans to cap the numbers of new small and
large casinos as well as enforce the current slot limits for
existing casinos.
The new gaming bill will
allow just 24 new venues for the next six years with eight
of each definition being allowed.
shares in London Clubs
International, Rank Group and Stanley Leisure fell prior to
Christmas by margins ranging from nearly 10 per cent to more
than 25 per cent.
London Club International
said it was 'extremely disappointed that the government has
restricted further the modernisation of gaming regulation',
as its shares dived by 26.6 per cent to 103p.
Over 100 proposals for all
sizes of casino projects had already been proposed with the
investment of about £5bn expected from firms in the
United States, Australia and South Africa. What has been
dubbed by the opposition Conservative Party as "a
humiliating retreat", has left the industry open mouthed
with shock.
Penny Cobham, chair of the
British Casino Association said "The British operators are
outraged. There was never going to be a massive explosion of
casinos. Talk of a casino on every High Street was just a
scaring tactic."
Shares in Rank Group were
down 10.9 per cent and Stanley Leisure fell 9.2 per cent to
433p.
British casino companies
have also said that the steep drop in their share prices
will leave them unable to compete against overseas firms for
the licences to operate the biggest regional style
venues.
Richard Jukes, a spokesman
for the BCA, slammed the government, accusing it of showing
no loyalty to domestic firms and warned that its failure to
consult the UK industry over recent proposals would be
reflected in the loss of jobs for British casino
workers.
"This appears to have more
to do with interests of overseas investors than it does
about the existing industry and UK jobs. For the Government
to bring forward a U-turn while the bill is still in
committee is unprecedented and indicative of the muddled
principle on which it was created. The limit on small scale
and large scale casinos is unnecessary and will make it more
difficult for the UK industry to bid for regional casino
licences he said," he said.
"Within hours of this
announcement more than one third was knocked off the value
of the UK industry. This could have been averted if there
had been some consultation with the UK industry. It's
interesting to note that while the UK share prices sank
there was a modest rise in US casino operated share prices -
it says a lot about the future of the industry. This was
supposed to be a modernising act but has become a more
restrictive regime than is currently operating."
After being battered and
bruised in a consultation process which has hung them out to
dry, many existing operators will be finding it difficult to
comprehend exactly what they stand to gain. Advertising and
more immediate access to an environment where the product
mix is severely disadvantaged seems a bitter pill for the
majority to swallow.
Related pages:
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