Gaming group Stanley Leisure today said it would consider tendering for all 24 new casinos permitted under a relaxation of UK gaming laws.
Stanley signalled its intentions after the government scaled back its deregulation plans last month to allow only eight “super casinos” and a further 16 medium or small sites.
Proposed amendments to the Gambling Bill also barred existing casinos from increasing the number of slot machines, dealing a blow to Stanley which operates 41 casinos in the UK.
Stanley has already linked up with Malaysian firm Genting to pursue the development of regional casinos in the UK, but is now looking at extending the relationship to weigh up “all new casino opportunities”.
Chief executive Bob Wiper said: “We will consider tendering for all 24 new casinos as currently proposed in the Government’s latest Gambling Bill.”
Details emerged as Stanley offered little evidence that its luck was turning after a string of setbacks, including heavy losses to a major player at its London casinos, forced it to warn on profits earlier this month.
Although pre-tax profits before goodwill were up by 14% to £25.1m during the six months to October 31, the group confirmed its haul for the full year was unlikely to beat the £41.8m reported last year.
In addition to the winning streak by the high roller, Stanley has also suffered from unpaid debts at its casinos and adverse sporting results at its chain of 600 bookmakers.
A small number of casino gamblers have not settled their accounts and these debts might not be recovered fully before the end of its financial year in March, the company said.
Stanley added that racing results have been poor at a time when Premiership title challengers Arsenal, Manchester United and Chelsea were enjoying winning runs.
Chairman Lord Steinberg said: “Although individually these factors could be described as normal fluctuations, in aggregate they have had an impact on our outlook for the financial year.”
Stanley operates four casinos in London – Crockfords, The Colony Club, The Mint and The Palm Beach – as well as 37 regional sites in cities including Bristol, Liverpool and Birmingham.
Turnover during the first half of its financial year was up 28% at £964m, largely on the back of punters placing higher stakes at its betting shops. However, unfavourable sports results meant bookmakers were also paying out more.
Longer opening hours meant Stanley was paying more in wages and costs were about £4.5m higher than a year ago.
At its casinos, win margins returned to more normal levels in the period to October following last year’s run of good luck by a number of major customers.
Star City – the largest casino in the UK – racked up losses of £1.1m, although management said the full potential of the Birmingham site would only be achieved once the industry is deregulated.
CSFB analyst Tassos Stassopoulos was unconvinced: “We believe that the restrictions in the number of small, large and regional casino licences make it hard to see a quick turnaround in Star City,” he said.
The view that Stanley would have difficulty in taking maximum advantage of a relaxation in gaming laws was shared by Investec analyst Matthew Gerard.
He said: “With an existing estate of small and large casinos, we remain cautious on the potential upside from gaming deregulation given amendments to the Gambling Bill restricting slot machines.” Shares were 0.75p lower at 415.25p.
References: EGi News 26/01/05
