Gambling expansion seen favoring U.K. incumbents

Wednesday, April 7, 2004 | 9:07 a.m.

LONDON -- Rank Group Plc and London Clubs International Plc, owners of casinos in the U.K., said their expansion would benefit from proposals by British lawmakers today to further deregulate the country's $3.8 billion gambling industry.

Rank, based in London, welcomed recommendations by the Joint Committee on the Draft Gambling Bill to overhaul 35-year-old legislation by, for instance, allowing all casinos to offer bingo and betting and permitting operators to install larger numbers of gaming machines.

Rank and London Clubs are expanding their U.K. casino operations and Wembley Plc has become the subject of a bidding war between U.S. gaming companies on expectations further relaxation of the gambling laws, which analysts expect to take effect by 2006, will stoke demand. About 80 percent of Britons gambled in the past year.

"We believe that ultimately this will prove to be a positive report for the incumbents, with likely delay being the biggest risk to them rather than the arrival of foreign competition," Ian Rennardson, an analyst at Merrill Lynch & Co. in London, wrote in a research note.

Rank shares rose 6.5 pence, or 2 percent, to 331.5 pence at 1 p.m. in London. London Clubs climbed 3.75 pence, or 3.2 percent, to 120 pence. Rank stock has gained 19 percent this year, and London Clubs has jumped 58 percent.

Shares of Stanley Leisure Plc, the largest U.K. operator of casinos and owner of 634 British betting shops, advanced 15.25 pence, or 3.2 percent, to 494.5 pence.

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