Manchester will host the UK's first Las Vegas-style supercasino, it was announced today.
The Casino Advisory Panel's shock decision is a blow to Blackpool and the Millennium Dome, which were considered front-runners to win the licence.
Up to 1,250 unlimited jackpot gaming machines will be housed on a 5,000 square metre site.
Steve Weaver, chief executive of Blackpool Council, whose bid was the bookmakers' favourite, said the resort was "surprised and hugely disappointed by the Panel's recommendation but we are not giving up".
Casino Advisory Panel chair Professor Stephen Crow, said: "All the proposals shortlisted for the regional casino presented their own particular and compelling strengths.
"We were, however, particularly impressed by Manchester's proposal, which in our view offers great promise.
"We found that the proposal had a unique formula to offer which served to set it apart from the others presented to us in terms of the full range of our specific remitted criteria of best test of social impact, regeneration need and benefits and willingness to license."
Manchester's bid promised the "highest standards of social responsibility", with an independent Community Trust overseeing its workings.
Bid organisers said it would regenerate a poor area of east Manchester, promising a £265 million investment and 2,700 direct and indirect jobs in one of the most deprived parts of the country.
The bid also boasted an "unrivalled track record" in delivering major regeneration schemes that have transformed deprived areas of the city in the past.
The casino would be based at Sportcity in the Beswick area of Manchester, close to the City of Manchester Stadium, now used by Manchester City FC and built for the Commonwealth Games.
The bid was backed by the city council and regeneration quango New East Manchester.
The proposed regional casino site will also contain an entertainment complex with a range of facilities such as a multi-purpose arena, a swimming pool, an urban sports venue, restaurants, bars, a nightclub and a hotel.
Culture Secretary Tessa Jowell will consider the CAP's proposals before putting her recommendations to Parliament for a vote.
Doug Garrett, chief executive of ReBlackpool, the urban regeneration company that worked on the town's bid, said: "I'm very disappointed indeed at the outcome, Blackpool's future was something built around our plan.
"We believe the case that we put forward was a compelling one.
"We certainly won't be taking this as an end result. We still want to see change here.
"I'm very surprised but anything is a possibility.
"We still have a plan that was good and right yesterday and is good and right today despite the findings of the advisory panel."