Hilton Hopes High Of UK Casino Return
The Hilton Group, which owns more than 2000 betting shops in the UK through its Ladbrokes brand, is ready to gamble on the UK government's plans to modernise gaming legislation and the increased profile that should bring to UK casino wagering.
Although the group stands by its decision to sell of its 27 UK casinos to bingo operator Gala Group for £235m, Chris Bell, chief executive of Ladbrokes Worldwide and a Hilton board member, claimed the original move was all about timing, it looks increasingly likely that the betting giant will make an early return to its former hunting ground.
"In the UK there are 129 casinos and there is room for more", Bell said. "We're now living in a world that will have potentially an unlimited number of casinos, and we're seriously reviewing whether we should re-enter the market. Obviously, we would only do it on the basis that it would be commercially viable. But we would like to do it. We got out of casinos at just the right time and got a good price for them. The cash was reinvested in the business and now it's a good time to get back in."
Like the rest of the industry, Hilton is now waiting patiently for the governments to rubber stamp its plans for the sector, but hopes to be able to make a further announcement within four months.
"The logic is for a Hilton/Ladbrokes operation and we could do something with the existing hotels, for example, the Hilton in Blackpool. Equally, if there is a genuine commercial opportunity for us to build on a new site, it wouldn't have to have a hotel attached", Bell added.
Ladbrokes has become a major cog in Hilton's mechanics. Following the sale of the casino division, the hotels sector nose dived due to terrorism and Sars and the bookies now make more money than the hotels.
Ladbrokes was founded in the 1890's by a racehorse trainer who took bets on meetings in the Wiltshire town of Ladbroke. It floated on the Stock Exchange in 1967 for £1m and opened its first hotel six years later.
It was banned from UK casino operations in 1979 after claims that it had tempted heavy gamblers with gifts, canceling their debts or by paying commission to intermediaries who introduced big-spending customers. At the time, the casinos accounted for 40% of the company's profits and subsequently Ladbrokes shares collapsed.
It returned to the casino market 15 years later, buying three clubs. In 1987, it snapped up Hilton International for £645m with the name being changed to Hilton Group in 1999. UK analysts predict that the gaming industry's turnover could increase from £7bn to £10bn under the new, more liberal laws for operators.
