Gala Throws In Its Chips On $1bn US Partnership

Gala Group has called no more bets on its partership with US operator Harrah's blaming the government's back down on the number of new casinos for the break up of the proposed $1bn joint venture.

Signed back in June 2003, the partnership is believed to have cost the two companies a total in the region of £2m. It is one of the first fatalities of the government's widely regarded about-turn in scaling back deregulation, but will no doubt not be the last. For the deal to turn out how the two parties had envisaged, they would have to have been granted all eight of the new regional licences, which clearly wasn't going to happen.

Gala said that despite the termination of the 50-50 joint venture, it did not signal the end of its relationship with Harrah's and that it would maintaina 'strategic alliance' with the US group 'to take advantage of the opportunities that may arise following enactment of the Bill.'

Gala chairman John Kelly said: "We have built up an excellent relationship with Harrah's over the last two years and we do not intend to let that go to waste. But the joint venture is no longer the approprate vehicle for us."

Gary Loveman, Harrah's president and chief executive, added: "It is now clear that the UK gaming market will develop in a different way than that envisaged when we set up the joint venture."