London Clubs may take £80m charge over failure of Las Vegas casino

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The Independent Online

London Clubs International, the gambling group that lost its own bet on the lucrative US casino market, warned yesterday that it may have to take a £80m hit to cover its ill-fated move into Las Vegas.

The stakes were heightened in London Club's quest to negotiate its way out of up to $150m (about £102m) of liability to its troubled Aladdin casino after the Las Vegas venue filed for bankruptcy on Friday.

Shares in London Clubs, which have spent the last week hovering off record lows of 6.25p, yesterday lost 9 per cent to close at 12.75p. The stock has bounced around on speculation that World Resorts, a leading Malaysian gaming group, may launch a bid after increasing its stake to 5 per cent.

A spokesman for the British gambling group yesterday reiterated that the company was in talks with its banks, led by Bank of Nova Scotia, to reduce its liability. "London Clubs is quietly confident, but we are not there yet," he said.

Other possible suitors include Stanley Leisure and Rank Group, two rival gambling groups.

Under Chapter 11 bankruptcy protection, the 2,567-room Aladdin can continue trading while London Clubs and co-owner Somner Trust seek a solution. London Clubs is jointly responsible with Somner Trust to pay $150m to Aladdin's bank syndicate.

Analysts warned that if London Clubs cannot reduce its liability, the group will face an enforced sale of its London assets, which include the prestigious Les Ambassadeurs and 50 St James casinos in London. The London Clubs spokesman said that the group was not yet in any talks with any potential buyers.

Aladdin, which opened behind schedule in August last year, has lost business since the 11 September terror attacks in the United States, which have put Americans off flying to Las Vegas.