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Manchester picked to get Britain's first LV-style casino

31 January 2007

MANCHESTER, England -- American gaming analysts were surprised Tuesday that Britain's first Las Vegas-style casino will be built in the city of Manchester, beating out London and the seaside community of Blackpool.

The independent Casino Advisory Panel recommended Manchester, located 195 miles northwest of London, for the casino as a way of fostering badly needed economic development in the city, best known for its industrial heritage and the soccer club Manchester United.

The location is still subject to approval by British lawmakers and Culture Secretary Tessa Jowell. Prime Minister Tony Blair's office said Jowell and lawmakers would likely agree with the panel's findings, which had been "an honest assessment of the various criteria."

The new casino, which would be the country's largest, will be a minimum of 54,000 square feet and have 1,250 slot machines.

Bahamas-based gaming group Kerzner International was expected to show interest in the location. The company, which operates the Atlantis on Paradise Island in the Bahamas, had previously won a $509 million contract to build a small casino at the site in Manchester. The process was reopened, however, following reforms to British gaming laws in 2005.

Gaming analysts thought Las Vegas-based casino companies MGM Mirage, Harrah's Entertainment and Las Vegas Sands Corp. would submit bids for the site, but their interests may have waned. It was once thought more than one large-scale casino would be approved.

"U.S. operators were once eager to participate in the United Kingdom opportunity, however we believe enthusiasm has tempered somewhat as the size and scale of the projects has been diluted," Deutsche Bank gaming analyst Bill Lerner said in a note to investors. "Gaming operators have been previously linked to certain locations, but the winning city is expected to invite companies to bid for construction and management of the casino."

Britain relaxed gaming laws in 2005, saying it planned to use new casinos to boost economies in areas with high unemployment. Britain already has some 140 small- and medium-size casinos, mainly based in major towns and cities.

However, British lawmakers reduced the Gambling Act considerably, cutting the original plans for 20 to 40 casinos down to eight, eventually settling on just one "supercasino," which allows for 1,250 slot machines and an unlimited number of table games.

Eight large casinos with unlimited table games and a maximum of 150 slot machines and eight small casinos with 80 slot machines were also approved.

Both MGM Mirage and Las Vegas Sands had previously been linked to Manchester.

"Parliament must give formal approval for the recommendation, after which companies will begin a bidding process to be chosen to build and operate the super casino," Bear Stearns gaming analyst Joe Greff said. "Genting International (of Malaysia), MGM Mirage and Harrah's are among competitors that have previously shown an interest in developing projects in Manchester, and bidders will have to submit detailed projects to the city, who will then decide the winner."

In 2005, Las Vegas Sands had a development agreement with the Manchester United soccer club, but the deal ended when the Florida-based Glazer family, owners of the National Football League's Tampa Bay Buccaneers, purchased the soccer team.

"We're familiar with Manchester and it's an excellent marketplace," Las Vegas Sands spokesman Ron Reese said. "We are evaluating the level of investment required to make it a true integrated resort experience."

In a statement, Andrew Tottenham, managing director of European Development for Harrah's, said the company was clearly interested in the casino site.

"We look forward to learning the details of the public tendering process necessary to objectively select the casino operator to ensure the local community of Manchester will realize the maximum benefit of this planned development," Tottenham said.

In a statement, MGM Mirage said, "We've noted the recommendations made by the UK's Casino Advisory Panel and we're reviewing our plans accordingly."

Stephen Crow, the advisory panel's chairman, said that although Manchester has one of the country's fastest-growing economies, it was "the third-most deprived local authority area in England."

Sir Howard Bernstein, chief executive of Manchester City Council, said bids would be requested for a contract to build and operate the casino. Operators would likely sign a 250-year lease agreement with the City Council, which owns the land, he said.

Lawmakers claimed the casino would bring around 2,500 jobs and that hotels and other leisure businesses would boost the total to around 10,000.

The Associated Press contributed to this report.