Gaming stocks hit hard by climbdown on casino numbers

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The Independent Online

Britain's gaming groups attacked the Government yesterday for its shock decision to scale back controversial plans to liberalise the country's antiquated gambling laws.

Britain's gaming groups attacked the Government yesterday for its shock decision to scale back controversial plans to liberalise the country's antiquated gambling laws.

Millions of pounds were wiped off the value of Stanley Leisure, Rank and London Clubs International after the Government stunned the industry by revealing it would not allow existing casinos to benefit from the gaming shake-up.

The Government, which had already limited the number of giant regional casinos at eight, yesterday capped the number of large and small casinos at eight apiece and banned existing casinos from operating more than 10 slot machines from each site. Casino operators had hoped to be allowed to install up to 150 slot machines at large sites and 80 at small sites.

Paul Leyland, an analyst at Seymour Pierce, said: "The Daily Mail campaign panicked the Government. It's shockingly that simple."

Penny Cobham, who heads the British Casino Association, said: "The British operators are outraged." Privately, gaming executives condemned the Government's move as anti-competitive, arguing it favoured international operators because slot machine limits will not apply to the new sites.

John Kelly, who runs Gala Group, said: "We believe it [the legislation] is now inequitable in the extreme."

Opposition MPs attacked the Government's U-turn. The Conservative Culture spokesman, John Whittingdale, said: "Instead of the initial intention of the Gambling Bill, to liberalise the rules governing gambling, the Bill now imposes a more restrictive regime than exists at present."Don Foster, the Liberal Democrat Culture spokesman, said: "For a gambling policy sold on the regeneration benefits of new casinos it's especially surprising that regeneration is now relegated to a factor that may be taken into account."

Under the new system set out yesterday, no more than 24 new casinos will be allowed to open by 2007. An independent panel will advise on suitable locations for new casinos - but it will not report until late 2006. After the first new casinos are opened, the Government will spend three years assessing whether there is a surge in the number of gambling addicts before it decides whether to lift the cap.

Since Sir Alan Budd's report on liberalising the gaming laws was published in 2001, investors have piled into gaming stocks. Yesterday shares in Stanley Leisure fell 9 per cent, Rank's tumbled 12 per cent and London Clubs International plummeted 26 per cent.

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