London Clubs International, the owner of casinos such as the 50 St James and Les Ambassadeurs in London, yesterday drew a line under its disastrous attempt to take on Las Vegas by taking a £7m hit.
London Clubs International, the owner of casinos such as the 50 St James and Les Ambassadeurs in London, is looking for partners to help build Las Vegas-style casinos in the UK.
The company yesterday drew a line under its disastrous attempt to take on Las Vegas itself by booking a £7m hit on its ill-fated Aladdin venture.
LCI is now looking to exploit the forthcoming deregulation of the UK gambling market. The Government plans to relax gambling laws to allow large "destination" casinos in run-down areas, each able to house 1,250 slot machines with unlimited prizes.
But fearing widespread availability of these machines, the Government has banned them from existing casinos. This has hampered LCI's original plans to expand its current venues, and yesterday it said it would look to build destination casinos with the help of an outside investor.
"In common with others in the UK casino industry, we were disappointed with the restrictions the Government introduced," Barry Hardy, chief operating officer of LCI, said. The Government is now looking again at whether to allow Las Vegas-style machines into existing casinos, which Mr Hardy welcomed. "We will still expand our existing sites to include more gaming machines," he said. "We have made sure that our existing sites have lots of additional space around them, so it will be easy for us to enlarge them."
The £7m charge for settling bankruptcy proceedings on LCI's Aladdin casino in the US, which went under in 2001 only one year after opening, knocked pre-tax profits for the year by 53 per cent to £2.5m. "It is all done and finished with now. It was an expensive lesson but we will learn from it," Mr Hardy said. The banks behind the Aladdin venture had wanted to charge up to £15m but the company raised £49m through a rights issue last year to settle all its liabilities relating to the venture for £7m. The rights issue also helped the group refinance its debt mountain.
Excluding the charge for Aladdin, LCI profits rose 12 per cent to £9.5m, as operations elsewhere proved a better bet. While turnover dropped 9 per cent in its London casinos, which were hit by a drop in visitor numbers from the Middle East, the group's casino in Egypt performed strongly. Turnover was up 58 per cent and earnings were up 220 per cent.
LCI did warn, however, that this year's results would be impacted by the closure of The Sportsman casino which is being moved to a different part of London and the delayed revamp of 50 St James.Reuse content