US Casino Groups Face UK Setback
US casino operators poised to invest billions of pounds in the UK stand to have their hopes dashed as politicians seek to scale back planned gaming law changes.
Influential members of parliament, concerned that deregulation could worsen gambling problems, will on Tuesday recommend that many restrictions should remain. Only last week Goldman Sachs estimated that £6bn ($10.9bn) could be invested in the UK casino sector in the five years following changes to the law.
A big attraction to US operators was a provision that allowed casinos with more than 40 gaming tables to install potentially unlimited numbers of slot machines. However, a committee of MPs from across the political spectrum will recommend a ceiling on the number of slots allowed in each UK casino.
This would be a blow to companies such as MGM Mirage, Isle of Capri and Las Vegas Sands, which have pinned growth prospects on a freed-up market.
The cross-party committee is also believed to be recommending that casinos above a certain size be confined to specific "regeneration zones" such as Britain's ailing seaside resorts. This would disrupt the plans of US operators such as MGM Mirage, which has invested considerable time finding locations for its Las Vegas-style casinos.
Terry Lanni, chief executive of MGM Mirage, said: "If the UK government is committed to obtaining capital and investment that will lead to significant numbers of new jobs, it would be more desirable for companies to build properties where they want to rather than just in areas in need of regeneration."
If the government ignored the committee recommendations, it would risk losing support for the bill. This could mean its passage into law taking place later than 2006, the date the industry has been working towards.
Gary Loveman, chief of US casino group Harrah's, which has struck a development deal with Gala of the UK, said: "We hope to move to a full passage in parliament later in the year. My greatest concern is that events interfere and push the bill back."
