Government to allow just eight supercasinos

Only eight supercasinos will be built in Britain in a major climbdown on gambling to be announced today by the Government.

Only eight supercasinos will be built in Britain in a major climbdown on gambling to be announced today by the Government.

The "pilot" of the Las Vegas-style casinos will be followed by a thorough review to see if they lead to more gambling addicts.

The U-turn will come as a bitter blow to the US gambling industry, which has pumped millions of pounds into lobbying for the casinos and had expected to build between 20 and 40 in Britain. But it is expected to delight Labour MPs who have warned that the proliferation of Las Vegas-style casinos will seduce people on low incomes into losing their cash.

The restriction to eight casinos in Britain is far lower than expected and likely to lead to a scramble for approval among towns who believe they will lead to regeneration. Blackpool is likely to be a site for one of the massive casinos, which could have more than 1,000 fruit machines with unlimited jackpots.

Last night a source at the Department for Culture, Media and Sport said the Government would be consulting in the next few weeks to decide the location of the pilot casinos. He said: "Tessa [Jowell, the Secretary of State] has been listening to what her colleagues have been saying. She wants to strengthen the triple lock and will be consulting on a first phase for supercasinos. There will be eight pilots and there will be an assessment to see if there should be more after a reasonable period to assess the social impact."

Ms Jowell ordered the U-turn after a rebellion by Labour backbenchers and fears the entire Gambling Bill could be blocked by the House of Lords.

The Government may take further measures to limit the casino industry if its plan to cap the number of supercasinos leads to proliferation of smaller casinos on high streets.

It emerged yesterday that the Government will also consider fears - voiced by many of the overseas gambling groups - that in limiting the number of supercasinos it will inadvertently fuel the emergence of smaller casinos across Britain. These would have as many as 150 slot machines paying out prizes of no more than £2,000.

Peter Byrne, of the South African gaming company Sun International, said problem gambling in the UK would increase, while Rob Howarth, of the property agents Jones Lang LaSalle, who has been brokering casino deals, said this type of smaller casino would be in every small town in the UK.

The Government is now expected to monitor the opening up of smaller casinos while the pilot of supercasinos goes on.

Last night Ms Jowell told a meeting of Labour MPs and peers that Parliament would have a chance to vote on whether the number of supercasinos would be extended.