Site List Out for Casino in U.K. - Friday 26th of May 2006

by Rod Smith

Las Vegas Gaming Wire

ENGLAND, SCOTLAND, WALES The odds improved Wednesday for one of the major Las Vegas-based casino companies to enter the British gaming market big-time.

In London, the Casino Advisory Panel announced a short list of eight locations that will be open to development of the first Las Vegas-style casino in the United Kingdom. American operators with interests in British projects include Harrah's Entertainment, MGM Mirage, and Las Vegas Sands Corp., all of Las Vegas; Kerzner International and Isle of Capri Casinos.

The site list released by the British government-appointed independent advisory board had Blackpool, Wembley Stadium, Cardiff, Glasgow, the Millennium Dome, Manchester, Newcastle and Sheffield as U.K. sites for the proposed Las Vegas-style casino.

The short list of largely economically distressed areas was whittled down from 27 applications.

The development of Las Vegas-style casinos in Great Britain is particularly important here because of its ability to feed Las Vegas' voracious demand for visitors, said Brian Gordon, a partner in the Las Vegas-based market research company Applied Analysis.

"A significant share of our international visitors come from the United Kingdom with some travelers visiting Las Vegas more than once a year," he said. "Expansion of gaming in England will give gaming operators in Las Vegas an opportunity to increase our profile, pique consumer interest and generate added visitor traffic."

Matthew Jacob, senior gaming analyst with Wall Street-based Majestic Research, said the British market is doubly valuable for Las Vegas operators, both because of Britons' high propensity gamble and its potential as a feeder market.

"It's essentially the Harrah's (Entertainment) model applied internationally, cross-marketing casinos there with the market here," he said.

The Harrah's business model focuses on developing regional gaming operations and feeding customers into a computerized, national players network and major casino operations.

Jacobs said the development of a supercasino in Great Britain is important because the potential for growth within the United States is limited with no new markets opening and the best sites spoken for in established markets.

Deutsche Bank analyst Marc Falcone said the final selection will probably depend on how much a supercasino could add to the efforts to redevelop one of the depressed areas, based on estimates by the British government.

Las Vegas Sands has two agreements with the Rangers Football in Glasgow and Sheffield United Football clubs in Sheffield.

MGM Mirage has focused early development efforts in Birmingham, which did not make the final list. However, it also has an agreement with Newcastle United for a 50-50 joint venture, and is pursuing opportunities in Glasgow and Sheffield.

Kerzner is involved with the Millennium Dome. Isle of Capri, which owns two-thirds of three Blue Chip pub casinos in Dudley, Wolverhampton and Walsall, has focused development efforts on Coventry, which also did not make the short list.

MGM Mirage spokesman Alan Feldman said his company is pleased to be associated with three of the final sites selected and still hopes that other supercasinos will be developed.

He added that the U.K. market is particularly important both because of its size and because of the well-established tradition of wagering.

Las Vegas Sands spokesman Ron Reese also said his company will continue to pursue opportunities in the United Kingdom in addition to the two deals it already has. The company is now talking with authorities in Blackpool, he said.

Harrah's has been pursuing opportunities to develop a supercasino at Wembley Stadium.

A spokesman for Harrah's had no comment.

British officials who will hear detailed plans for each bid will visit each of the sites over the summer.

A recommendation for the eventual supercasino site is to be delivered to the government in December, with a final decision in early 2007.

That decision, however, may not be the end of the story for Las Vegas operators, Falcone said.

In March, the British government was reported to be considering expanding the supercasino concept from a single site, as authorized by Parliament last year, to possibly four sites.

The legislation approved in 2005 includes a supercasino with unlimited table games and a maximum of 1,250 slot machines plus eight large casinos with unlimited table games and a maximum of 150 slot machines.

However, Falcone noted that the legislation represented a significant reduction from previous proposals.

"A report from the Office of the Deputy Prime Minister claims that after three years the U.K. could see another 40 super-casinos as well as hundreds of smaller ones," Falcone said.

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