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.
