The Home Office is understood to have postponed plans to introduce legislation which would have allowed casinos and betting shops to attract customers by installing more gaming machines. The proposals are unlikely to be adopted for several years at least, according to industry sources. Similarly plans to increase the number of casinos around the country by granting up to 25 new licences in provincial towns and cities are believed to have been shelved for the foreseeable future.
A question mark is also hanging over a number of other industry reforms which had been due to be introduced in a new government bill within the next few months. These include allowing punters to become a member of a casino by post. Under the current system customers are forced to apply in person.
The industry has been lobbying to be allowed some form of limited advertising. At present casinos are prevented from advertising or even listing their name in the phone book. However this measure could also be put on the back-burner along with proposals to allow customers to join a group of casinos by making just one application.
Before the election Labour Party officials told industry chiefs that it was keen to push ahead with the gaming deregulation programme that had been put in train by the Conservative administration. But since then it has dragged its feet and failed to announce the adoption of any new measures. Now there are growing fears throughout the betting industry that the Home Office is poised to make a policy U-turn.
One source said: "The government has other priorities at the moment with a heavy legislative programme. Gambling deregulation is hardly a vote winner and it will be swept under the carpet for the time being or possibly for ever."
Eighteen months ago the Tories increased the number of gaming machines permitted in casinos from two to six and fixed the maximum jackpot at pounds 250. The idea was eventually to allow three machines per gaming table with unlimited stakes and pay outs.
Two slot machines were also permitted in betting shops with payouts of up to pounds 10. Hopes of further machines appear to have been dashed.
The delays will have wide-scale financial repercussions for betting groups. Bruce Jones, a leisure analysts at Merrill Lynch, the City brokers, estimates that delays to gaming deregulation will cost companies millions of pounds of profits. The introduction of more gaming machines alone could have increased the profits at Stanley Leisure by a half, Stakis by a fifth and London Clubs International (LCI) by 15 per cent. "The introduction of gaming machines was the big prize for the industry," said Mr Jones.
The prospects of further delays have prompted an outcry from the betting industry yesterday. Alan Goodenough, head of LCI, one of the biggest casino operators in the country, but he said he was bitterly disappointed by the continued delays. "On the face of it the Government has a will to deregulate the industry but behind the scenes I am not quite so sure. The situation is a nonsense and is evidence of mollycoddling by a nanny state."
The delays may force casino operators such as LCI look overseas for expansion opportunities. "The fact of the matter is that we are a mile off the international pace. This could take a lot of business overseas and this decision could damage the economy of the country and the tourist industry," said Mr Goodenough.
However the move was welcomed by anti-gambling pressure groups and by charities which have already seen revenues eroded by the National Lottery.
Even if gaming deregulation is eventually adopted, the industry will probably have to accept watered down proposals.
The Home Office said yesterday that the deregulation of the gaming industry was still under consideration but refused to comment on whether immediate plans had been shelved.