It has been known for some time that Prime Minister Gordon Brown would axe the plan for a pilot regional casino in Manchester and now a leaked letter has confirmed this. The Department of Culture, Media and Sport has written to the Scottish and Welsh administrations, as required by law, to inform them that the Government intends to proceed with licensing the 8 large and 8 small casinos but scrap the Manchester super casino licence.

The DCMS is still saying that no final decision on the matter has been made – that announcement will wait until Parliament returns after next week’s break. When that moment eventually arrives, the city of Manchester will have to consider whether to pursue a legal claim against the government. After all, Manchester City Council spent time, money and resources in presenting its winning bid for the regional casino licence allowed under the Gambling Act 2005.

The sixteen Councils around Britain that will be given the go-ahead for the other new licences will then have to find investors to develop the casino locations. This task has not been made any easier by Gordon Brown who last year raised gaming tax. Ladbrokes, a company that was in the process of regaining a hold in the UK casino market, has already declared that it will not be bidding for any of the licences. Having reviewed the situation, Ladbrokes decided that the return on capital would take too long.

Ironically, some of the places best suited for a large casino have lost out by seeking the bigger prize. Other Councils have been awarded the new casino licences but operators may consider, like Ladbrokes, that the costs involved in development potentially outweigh the returns. With the downturn in economic outlook and finance harder to come by, the decision to proceed with licences for 16 casinos bigger than any yet seen in Britain may have come a year too late. (E-02.07.08)

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