London Clubs hit by high rollers on a lucky streak
London Clubs, which operates the Ritz and Les Ambassadeurs casinos in central London yesterday blamed a winning streak by some of its heaviest gamblers for a sharp fall in half year profits.
Chief executive Alan Goodenough said: "Good fortunes were enjoyed by a number of our major customers both at the Ritz and more unusually at the Rendezvous."
Top casinos define high rollers as the handful of super-rich who can gamble away up to pounds 10m in a single night. In addition there is a group of several hundred international players who are willing to stake anything from pounds 500,000 to pounds 3m a session. This group's success at the roulette and blackjack tables forced London Clubs' half year profits down from pounds 19.9m to pounds 14.4m.
London Clubs said trading since the half year had seen many punters hit a losing streak, helping figures for the first eight months higher than last year. However, there are concerns in the industry that the effect of the strong pound and the financial crisis in Asia could affect even the wealthiest punters.
Mr Goodenough said the volatility at the upper end of the market, together with frustration over the lack of progress in the de-regulation of the industry had persuaded the company to accelerate its plans to expand outside Britain. "The potential for growth in the UK without de-regulation benefits is restricted. So we are looking at international markets," he said.
The casino industry has long complained that it is disadvantaged against other forms of gambling in Britain and against other casino markets around the world by the UK's gaming regulations. These restrict the number of slot machines that can be installed in casinos and state that customers must become a member of a casino 24 hours before being allowed entry.
London Clubs will lose its licence to operate the Ritz Hotel casino next June after failing to agree a new licence with the hotel's owners, the Barclay Brothers. It plans to open a new casino in St James Street next July.
A company led by Aidan Barclay, the son of David Barclay is currently seeking the licence to operate the Ritz Hotel casino. The application is currently being heard by Westminster magistrates and a ruling is expected later this month.
The application is being supported by Lord King, the former British Airways chairman, and the industrialist Lord Hanson. The Barclay brothers, who bought the Ritz in 1995, have said they have no financial interest in the company applying for the licence.
With odds on expansion looking poor at home, LCI is trying its luck abroad. It yesterday confirmed plans to invest $50m in a 25 per cent stake in Aladdin Gaming, the US group which is re-developing the Aladdin hotel and Casino in Las Vegas.
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