THE country’s leading gaming companies have scaled back plans to bid for the 16 new casino licences that were created last year, leaving the government’s strategy for the industry in disarray.

The economic crisis has proved the final nail in the coffin for most big operators, which were already questioning the viability of many of the proposed venues.

British casino groups, including Rank, Gala Coral and Genting Stanley, all plan to bid for just a few of the new licences.

Along with other key operators, such as London Clubs International (LCI), Aspers and the bookmaker Ladbrokes, all said they were expecting to pursue only a few licences.

The government’s Casino Advisory Panel announced the locations for the 16 new-style casinos in January 2007, and some local authorities have begun tendering for operators to bid for the licences.

A number of factors, however, such as an increase in gaming duty last year, have prompted the rethink among Britain’s leading casino groups.

The economic crisis has shaped their thinking, with most reluctant to commit significant investment in large-scale projects that are unlikely to generate a financial return for several years. None of the proposed new sites is expected to open before 2011.

“The current economic situation and the government’s attitude towards casinos have sapped a lot of the confidence from this entire process,” said one casino executive.

Another said: “We are looking at a lot fewer of these things than we were originally. In a better economic environment, they are viable and appealing. In the current environment, it will be challenging to make a number of them work.”

One industry source pointed out, for example, that LCI had recently opened a £15m casino in Leeds, one of the sites earmarked for a new casino. “For someone to compete with that, they are going to have to build something bigger and better. In the current market, that’s just not going to happen.”

Although proposed casinos in large conurbations such as Newham in east London and Solihull in the Midlands are likely to remain appealing to some operators, proposals to open casinos in quieter areas, such as Dumfries and Galloway, Torbay and Scarborough, are likely to be given a wider berth.

There has been anger in the industry since the government plans were first announced because the 16 new casinos will be permitted greater freedoms than existing venues.

In particular, they will be allowed to run far more slot machines than is presently allowed. These games are highly lucrative for the operators.

One executive pointed out that 11 of the areas where new casinos are planned already have gambling sites, and that this could create an uneven playing field between the two types of venue.

Although British groups are baulking at the idea of going for the new licences, local councils may find that overseas casino companies are more willing to bid for them.

Groups such as Casinos Austria are said to be interested in some of the sites and could end up winning the licences.

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