London Clubs International (LCI) has recommended the Harrah’s offer to its shareholders but the story may not end there. The gaming division of giant Malaysian Genting Bhd has shares in both LCI and Stanley Leisure (nearly 30% and nearly 20% respectively), and could make a counter bid for LCI. Or it could sell its LCI share holding and buy a bigger share of Stanley. Genting is said to be reviewing its strategic options.

As shares in LCI and Stanley have risen sharply, it seems the markets are betting on rival bids. There is also another UK gaming operator, Rank, considered to be ripe for a takeover. The four long-time players on the UK gambling scene – Stanley, Rank, Gala and LCI – are likely to see that scene shifting rapidly. Bookmaker Ladbrokes has already broken back into the casino business; Gala is now Gala Coral.

US company Isle of Capri has seen its planned regional casino in Coventry’s Ricoh Arena out of the bidding and could look to up its stake in the British gaming industry. MGM Mirage, Kerzner and Las Vegas Sands are all possible future players in the UK casino market, and LCI is considered to own strategic assets. Apart from its existing casinos it has another five licences for new casinos, including entertainment complexes in Manchester (due to open in October) and London’s Leicester Square.

It is not only the UK gambling laws that are being shaken up; the status quo of its four major operators is being challenged. The UK gaming industry is being reshuffled and it has yet to become clear which players will sit at the table and which will hold winning hands. Consolidation is on the cards and the LCI Harrah’s deal may just be an opening bet. (E-09.01.06)

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