LONDON: Gala Group Ltd., Britain's largest bingo-club owner, ended a US$1bil joint venture with Harrah's Entertainment Inc. to build eight casinos in Britain after the government scaled back plans to deregulate the industry.
The companies will instead develop a strategic alliance to consider opportunities arising from the UK Gambling Bill, Nottingham, England-based Gala said in an e-mailed statement.
The ending of the joint venture, signed in June 2003, comes after the government said it would limit the number of new casinos in the country to 24. The measures were aimed at quelling concern among lawmakers in the ruling Labour Party that the proposed new laws would tempt people to gamble too much.
``The joint venture envisaged spending around US$1bil on up to eight regional casinos,'' Gala chief executive John Kelly said in yesterday's statement. The government's current proposals make this ambition unrealisable, and so the joint venture is no longer the appropriate vehicle for us.''
Harrah's, the second-largest US casino operator by market value, said the British gaming market would not develop in the way it had envisaged when it formed the joint venture.
Opportunities have been greatly restricted,'' Gary Loveman, chief executive of Las Vegas-based Harrah's, said in the statement. Nonetheless, we see an ongoing relationship with Gala as an important element in our continuing interest in Britain. Bloomberg
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