Gala plans to launch bingo on the Web

Gala Bingo, the privately owned gaming group, is to launch an interactive gaming site as it seeks to expand the Gala brand ahead of a possible flotation later this year.

The site, which will be the first internet product from a UK company to combine casino and bingo, will be licensed and run out of Gibraltar where Gala has a casino.

John Kelly, the chief executive, said the site, Gala Interactive, was intended to "support the existing bricks and mortar" business.

"It's not being developed as a stand-alone third leg but to extend the Gala brand to attract those customers who wouldn't necessarily go to a bingo club or a casino," Mr Kelly said.

The site, which will be launched this summer, will cost £5m to develop and is expected to break even within nine months of going live.

Mr Kelly, who led a management buy-in to acquire Gala from Six Continents, formerly Bass, in 1997, said the site would be moved back to the UK as soon as legislation was passed to make gaming on the internet legal in the UK.

The gaming industry is gearing up to benefit from sweeping changes to the regulatory environment following a Government White Paper on gambling reform that could see Las Vegas-style mega resorts become popular in Britain.

While many of the reforms to Britain's gaming act are unlikely to become law before 2004, the prospect of deregulation has boosted the chances of Gala, which is backed by Credit Suisse First Boston and Royal Bank Private, announcing a £800m stock market flotation this year.