High roller knocks a hole in Stanley Leisure profits

A high roller on a £3m winning streak at one of Stanley Leisure's upmarket London casino has hit the group's profits this year.

A high roller on a £3m winning streak at one of Stanley Leisure's upmarket London casino has hit the group's profits this year.

It revealed yesterday that its profits for 2004 were unlikely to improve on 2003 after it suffered "material losses", believed to be in the region of £3m, to a "major player". Stanley owns a number of exclusive casinos such as Crockfords in Mayfair, which attracts billionaire punters such as the retail tycoon Philip Green. Such establishments are vulnerable to high stake wins.

Stanley also said several punters who lost money at its tables have not settled their accounts and these debts, amounting to about £3m, may not be recovered before the end of its financial year.

To make matters worse, the success of favourites in the sporting field has damaged results in its betting division. The continued run of successes for Arsenal, Chelsea and Manchester United in the Premiership, and wins by favourites such as Kicking King in the King George VI Chase on Boxing Day, have been bad news for Stanley.

Shares in Stanley fell 11.5 per cent on the news, closing at 381.25p, with analysts wiping about 25 per cent off their forecasts for the year ending 31 March 2004. Stanley is not expected to deliver more than the £42m of profits it made in 2003. Adverse sports betting results are also likely to have hit rival bookmakers, and shares in rival bookmakers, William Hill and Hilton, which owns Ladbrokes, also came under pressure.

But many in the City remain unconvinced that Stanley's problems are industry-wide. It had a profits warning in May, and high rollers caused a £14m loss at its Crockfords casino last year.

In November, Stanley told investors that trading had stabilised and its chairman Leonard Steinberg netted £36m from selling a stake in the business to Genting, the Malaysian casino operator. One analyst said: "Stanley says betting and gaming results are cyclical and results don't always go the punters' way, but it seems to be happening too many times with Stanley."

Gala, the bingo club operator, announced last night that it was withdrawing from plans to develop Las Vegas-style casinos in the UK. It had a joint-venture with Harrah's, a US casino group, through which it intended to build a number of gaming resorts. But the recent climbdown by the Government on the number of casinos it will allow has reduced the prospects for Gala in this area.

John Kelly, the chairman of Gala, said: "The joint venture envisaged spending about $1bn on up to eight regional casinos. The Government's proposals make this ambition unrealisable and so the joint venture is no longer the appropriate vehicle for us."