Las Vegas Sun

March 28, 2024

Aladdin investment depressed London Clubs second half

BLOOMBERG NEWS

LONDON -- London Clubs Plc, the British owner of 11 casinos, Monday said second-half profit slid 95 percent after it lost money on an investment in a Las Vegas casino operator.

Net income slumped to 293,000 pounds ($537,581) in the six months through March 28 from 5.89 million pounds a year earlier after London Clubs paid 6.3 million pounds for refinancing related to the bankruptcy protection of its former Aladdin Gaming LCC unit.

Annual earnings will also be hurt by the relocation of The Sportsman casino and the later-than-planned reopening of the 50 St. James club in London following refurbishment.

London Clubs is revamping and extending the size of its casinos as the United Kingdom plans further deregulation of its $3.8 billion gambling industry. Legal changes have already lured more Britons to casinos because they allowed operators to serve alcohol and provide live entertainment.

New legislation governing the industry -- including abolishing the need for casino players to be members, allowing operators to advertise, and letting companies open larger venues in more parts of Britain -- is likely to take effect by early 2006, Chief Operating Officer Barry Hardy said on a conference call with reporters.

The company raised 49 million pounds from a rights issue in April to fund its expansion and take advantage of legal changes in what is a relatively underdeveloped industry in the United Kingdom in comparison with the United States. Just 4 percent of Britons visit a casino each year, compared with about 25 percent of Americans.

The company's attempt to enter the U.S. gaming market through Aladdin failed when the $1 billion casino it built in Las Vegas filed for Chapter 11 bankruptcy protection in 2001. A group led by Starwood Hotels & Resorts Worldwide Inc. received the go- ahead by a Las Vegas judge in June 2003 to buy Aladdin. The group hasn't yet been licensed by Nevada regulators.

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