The Government faces fresh embarrassment over its casino laws as potential bidders for the 16 new licences start to walk away from the process – just as the legal framework is finalised.

Casino groups Aspers, Gala, Rank, Stanley Leisure, Ladbrokes and Genting have all significantly cut back – and in some cases abandoned – their plans to make multiple bids for the new-style licences.
The Casino Location Order, part of the 2005 Gambling Act, is due to go before the House of Lords in the next few weeks where, if accepted, it will become law.

The 16 licences were created in a shakeup of Britain’s gambling laws and most significantly increase the number of slot machines allowed from 20 to 80 for small casinos and 150 for large ones.

But hopes that they would attract millions for regeneration, create masses of jobs and boost the gaming industry are now under threat.

Last year, after an 18-month process run by the Casino Advisory Panel costing GBP 400,000, a last-minute U-turn led to plans for a Manchester Supercasino being axed.

Even plans for the smaller casinos are at risk as bidders claim tax changes and a lack of joined-up thinking have left their businesses in tatters. ‚Enthusiasm has evaporated,‘ said one industry insider.

Aspers boss Damian Aspinall said he would bid for only four licences rather than five. Though European players such as Casinos Austria are being mentioned, most of the international interest has dissipated, with America’s MGM Mirage, which last week laid off 400 staff, looking unlikely to join the fray.

‚The commercial viability is just not there any more,‘ said a former bidder, pointing out that Government taxes take 24p out of every pound of profit. ‚This has nearly wiped us out and has made the Government the biggest shareholder in UK casinos.‘

Former Culture Secretary James Purnell last year said advertising rights for casinos might be withdrawn, adding further doubt and instability to the industry. Another casino operator questioned the locations chosen for the casinos, with many being industrial towns where the Government hoped the investment would spark large-scale regeneration.

He said: ‚It is ludicrous they are granting licences in these areas. It will not drive regeneration but put pressure on existing casino operators, who are already stretched, and send them to the wall.‘