Tax fears delay arrival of 'Las Vegas' casinos

US casino operators are holding back on their plans to invest billions in large-scale leisure and gaming venues in Britain, despite getting the go-ahead from the Government for high-prize slot machines in the UK.

US casino operators are holding back on their plans to invest billions in large-scale leisure and gaming venues in Britain, despite getting the go-ahead from the Government for high-prize slot machines in the UK.

MGM Mirage and Las Vegas Sands Inc (LVSI), two of the groups which have pledged huge investment to regenerate urban areas with leisure, entertainment and casino facilities, said they could not press ahead with any plans while the taxation of slot machines remained unclear. "The future taxation regime still needs clarity and will have a critical effect on the shape of the future landscape," Lloyd Nathan, the head of MGM's European development business, said.

The Government said yesterday it would allow the development of regional casinos with up to 1,250 unlimited-prize slot machines in town centres and residential areas, with the key aim of regenerating run-down regions. But outside investors are still being cautious while the Treasury reviews taxation levels.

Rodney Brody, of LVSI, said: "At present taxation is not at an acceptable level. We would encourage the Government to introduce a tax rate that will encourage outside investors like us to come in in a serious way. The longer it takes to be clarified, the longer it holds back our investment and areas go without regeneration. It is restricting our plans and is now key."

The UK casino industry was disappointed by the Government proposals. Some groups hoped to install high-prize machines in their existing sites, but the Government ruled this out, saying it could lead to problem gambling. Rank Group, which owns the Grosvenor casino chain and Mecca bingo halls, called the proposals to ban the machines from all but regional casinos "unnecessarily restrictive".

Notwithstanding the high-prize slot machine restrictions, the industry welcomed the Government's commitment to press ahead with the Gambling Bill, aimed at allowing casinos to advertise for the first time and letting customers enter their premises immediately. Present laws dictate that customers undergo a 24-hour "cooling-off" period between becoming a member and entering.

The Government said changing the gambling laws was "necessary and urgent." The Bill is expected to go before Parliament next month.