Sunday, May 28, 2006

The odds improved Wednesday for one of the major Las Vegas-based casino
companies to enter the British gaming market big-time. In London, the Casino
Advisory Panel announced a short list of eight locations that will be open
to development of the first Las Vegas-style casino in the United Kingdom.
American operators with interests in British projects include Harrah's
Entertainment, MGM Mirage, and Las Vegas Sands Corp., all of Las Vegas;
Kerzner International and Isle of Capri Casinos. The site list released by
the British government-appointed independent advisory board had Blackpool,
Wembley Stadium, Cardiff, Glasgow, the Millennium Dome, Manchester,
Newcastle and Sheffield as U.K. sites for the proposed Las Vegas-style
casino.

The short list of largely economically distressed areas was whittled down
from 27 applications.

The development of Las Vegas-style casinos in Great Britain is particularly
important here because of its ability to feed Las Vegas' voracious demand
for visitors, said Brian Gordon, a partner in the Las Vegas-based market
research company Applied Analysis.

"A significant share of our international visitors come from the United
Kingdom with some travelers visiting Las Vegas more than once a year," he
said. "Expansion of gaming in England will give gaming operators in Las
Vegas an opportunity to increase our profile, pique consumer interest and
generate added visitor traffic."

Matthew Jacob, senior gaming analyst with Wall Street-based Majestic
Research, said the British market is doubly valuable for Las Vegas
operators, both because of Britons' high propensity gamble and its potential
as a feeder market.

"It's essentially the Harrah's (Entertainment) model applied
internationally, cross-marketing casinos there with the market here," he
said.

The Harrah's business model focuses on developing regional gaming operations
and feeding customers into a computerized, national players network and
major casino operations.

Jacobs said the development of a supercasino in Great Britain is important
because the potential for growth within the United States is limited with no
new markets opening and the best sites spoken for in established markets.

Deutsche Bank analyst Marc Falcone said the final selection will probably
depend on how much a supercasino could add to the efforts to redevelop one
of the depressed areas, based on estimates by the British government.

Las Vegas Sands has two agreements with the Rangers Football in Glasgow and
Sheffield United Football clubs in Sheffield.

MGM Mirage has focused early development efforts in Birmingham, which did
not make the final list. However, it also has an agreement with Newcastle
United for a 50-50 joint venture, and is pursuing opportunities in Glasgow
and Sheffield.

Kerzner is involved with the Millennium Dome. Isle of Capri, which owns
two-thirds of three Blue Chip pub casinos in Dudley, Wolverhampton and
Walsall, has focused development efforts on Coventry, which also did not
make the short list.

MGM Mirage spokesman Alan Feldman said his company is pleased to be
associated with three of the final sites selected and still hopes that other
supercasinos will be developed.

He added that the U.K. market is particularly important both because of its
size and because of the well-established tradition of wagering.

Las Vegas Sands spokesman Ron Reese also said his company will continue to
pursue opportunities in the United Kingdom in addition to the two deals it
already has. The company is now talking with authorities in Blackpool, he
said.

Harrah's has been pursuing opportunities to develop a supercasino at Wembley
Stadium.

A spokesman for Harrah's had no comment.

British officials who will hear detailed plans for each bid will visit each
of the sites over the summer.

A recommendation for the eventual supercasino site is to be delivered to the
government in December, with a final decision in early 2007.

That decision, however, may not be the end of the story for Las Vegas
operators, Falcone said.

In March, the British government was reported to be considering expanding
the supercasino concept from a single site, as authorized by Parliament last
year, to possibly four sites.

The legislation approved in 2005 includes a supercasino with unlimited table
games and a maximum of 1,250 slot machines plus eight large casinos with
unlimited table games and a maximum of 150 slot machines.

However, Falcone noted that the legislation represented a significant
reduction from previous proposals.

"A report from the Office of the Deputy Prime Minister claims that after
three years the U.K. could see another 40 super-casinos as well as hundreds
of smaller ones," Falcone said.