Plans for a Las Vegas-style supercasino were finally scrapped today as the Government gave the go-ahead instead for eight large and eight small casinos.
Culture Secretary Andy Burnham said concerns about the "negative impact" of a regional casino lay behind his decision not to authorise one.
Mr Burnham told MPs he was satisfied that the 16 large and small casinos did not "pose the same level of risk" as the supercasino.
Announcing what he described as the "toughest regulatory controls for gambling in the world," the minister said the new casinos would have to provide "non-gambling areas" and be banned from providing free drinks.
Mr Burnham also warned that unless licensed gambling operators came up with more cash for the Responsibility in Gambling Trust to tackle gambling addiction they faced a statutory levy.
Tory spokesman Jeremy Hunt welcomed the move to increase resources available to the Trust but said the announcement would do nothing to combat problem gambling on the internet.
Mr Burnham's widely expected move comes after Manchester fought off stiff competition from Blackpool and the Millennium Dome in Greenwich to become the surprise choice to host the UK's first supercasino in January last year.
But the scheme was put on ice months later when peers rejected it by just three votes.
And it was finally deemed "dead in the water" by Whitehall insiders after Prime Minister Gordon Brown said regeneration might be a better way forward.
Today, Mr Burnham said "there was, and is, no consensus" over the supercasino.
Concerns were voiced in both Houses of Parliament about the negative impact of a supercasino operating on a scale never before seen in the country.
A study by the Gambling Commission showed that "problem gambling, although small, remains persistent" and Communities Secretary Hazel Blears had concluded that a supercasino would have only "marginal" regeneration benefits.
"I know my decision will disappoint many in Manchester and particularly east Manchester, one of the most deprived areas of the country."
But an ad hoc ministerial group will bring forward a range of regeneration alternatives for the area and produce its first report by the end of next month.
Blackpool would benefit from a package of investment, announced today, worth nearly £300 million.
Mr Burnham said he was satisfied the 16 large and small casinos did not pose the same level of risk but insisted he would "proceed with caution" by insisting on strict rules to protect young and vulnerable people.
He said the new casinos would have to close for at least six hours a day and expressed disappointment over the level of contributions made so far by licensed operators to the Responsibility in Gambling Trust.
"Unless the industry delivers a substantial increase in contributions by the end of this year and makes contributions in a timely fashion, I will seek the approval of this House for a statutory levy, at a rate to be determined," he warned.
Mr Hunt said some elements of the statement were welcome but criticised the Culture Secretary for failing to mention online gambling and demanded to know what the Government's policy was to tackle this.Reuse content