It seems that whilst Ladbrokes may be considering the option of getting back into gaming, London Clubs International (LCI) may finally merge with one of its UK rivals. Ladbrokes, the betting and gaming division of Hilton Group plc, ran casinos prior to losing its licence in 1979 and in May came the announcement that Hilton had been granted a casino licence. So far Blackpool and a joint venture at London’s Paddington Hilton have been mentioned, but the final Gambling Act 2005 may have dampened the company’s enthusiasm for re-entry into casino operations.

Ladbrokes recently bought Jack Brown, the Welsh chain of bookmakers, for £76 million (US$133 million) after a year of negotiations. It will now have 2,111 outlets in the UK, just 63 short of the total William Hill betting shops since that company’s acquisition of Stanleybet two months ago. Ladbrokes has plans to spend £12 million (US$21 million) on refurbishment and converting the bookmaking premises.

LCI owns 7 UK casinos and has 3 overseas operations but losses to high-rollers and delays to re-location and upgrading of some properties caused a loss of £1.4 million (US$2.45 million) last year. The company still has plans to bid for all 17 new casino licences that will be granted when the Gambling Act is implemented, even though rumours from the financial markets have been suggesting that a merger is a distinct possibility. Stanley Leisure fuelled speculation when it sold its bookmaking operations to become solely a casino operator, and the increasing stock holding of Genting Bhd in both Stanley and LCI has caused comment.

2004 was described as a ‘challenging’ year for LCI but the company won four new licences and has another two applications under consideration. A new operation in Manchester is scheduled to open mid-2006 and LCI is part of a consortium ready to make a bid for the one regional casino licence available under the new law. In October casinos will be able to double their slot machine numbers and abandon the 24-hour rule that at present prevents new customers entering to play immediately. However, LCI’s London operations at Les Ambassadeurs and Fifty will retain membership policies.

Last year Ladbrokes betting shops made a reported profit of £215.3 million (US$377.5 million) on turnover of £8.5 billion (US$14.9 billion). News of the Jack Brown deal had little effect on its share price, which eased 0.75p. On the other hand, LCI shares went up 2.5p despite the company’s declared losses, owing to the merger speculation. (E-07.22.05)

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