London Clubs mulls joint casino venture

Gabrielle Monaghan

Monday, Nov. 29, 2004 | 9:05 a.m.

London Clubs International Plc, a British casino owner whose stock has doubled in the past year, will probably enter a joint venture with a foreign counterpart to open a Las Vegas-style super casino in the U.K.

The London-based operator of 11 casinos has held talks with a "wide variety" of companies in the U.S. and other countries about building a super casino outside the U.K. capital, Chief Operating Officer Barry Hardy said on a conference call with reporters. The casino may cost as much as 100 million pounds ($189 million), he said.

The British government this month set an initial limit of eight super casinos in its proposed reform of the country's 36- year-old gambling laws, though it has yet to say how companies should apply to build and operate so-called regional casinos. The Gambling Bill, which will allow for U.S.-style casinos in Britain, was passed in the House of Commons on Nov. 1.

"We've had conversations with a wide variety of overseas companies, and we quite deliberately did not form any alliances at the moment because we want to see absolute clarity on what the regional casino framework is going to be," Hardy said.

The government is expected to say how it will allocate the super casinos to operators on Nov. 30, after which London Clubs will decide whether to share a joint venture with the "one or two preferred partners" it's chosen, the chief operating officer said. London Clubs would be "very competitive" if it's given one or two sites, he said.

London Clubs, whose casinos include The Rendezvous, Golden Nugget and the flagship Les Ambassadeurs in London, considers its venues in the seaside towns of Southend-on-Sea and Brighton as suitable locations for a super casino.

Stanley Leisure Plc, the country's largest casino operator, this week said it's teaming up with Malaysia's Genting Berhad to develop large casinos in Britain. The joint venture will control Stanley Leisure's option on a planned 125-million pound casino in Leeds, England. MGM Mirage and Kerzner International Ltd. in the Bahamas also plan to build casinos in the U.K.

"There could well be a lot of people interested in opening casinos and a restricted number of licenses," Hardy said. "We would be pretty optimistic about being successful but we won't go mad and say we want one of these casinos at any price."

London Clubs raised 49 million pounds from a rights offer in April to fund its expansion and take advantage of legal changes in what is a relatively underdeveloped industry in the U.K. in comparison with the U.S. Just 4 percent of Britons visit a casino each year, compared with about 25 percent of Americans.

Britons will spend 12.5 billion pounds annually on gambling in five years, up from 8.7 billion pounds in the year through April 2004, the government has predicted.