As ironic as it sounds, given the U.S. government’s attempt to snuff out international gambling over the Internet for its citizens, the largest domestic casino operators are seeking to expand into the international marketplace.
Already, Nevada-based gambling companies have taken their successful casino operations into the international market, with venues ranging from Macau and Singapore to Spain and Slovenia.
Now, the U.S. giants are focusing their attention on Great Britain, which is expected to become a vastly liberalized market over the next few years.
Harrah’s has already made a bid to snap up London Clubs, which owns a string of upscale London casinos, three other key venues with several more in the development pipeline.
It is believed that MGM Mirage will soon move to buy a UK firm, possibly the Rank Group, which owns 35 British casinos and is the second largest bingo operator through its Mecca brand.
Not to be left out, Las Vegas Sands, which already has plans to open casinos at several British football clubs, may make a bid into the UK market.
"The Americans have to come here," said the boss of one major British gambling firm. "Harrah’s and MGM have to buy — they’re looking at what Las Vegas Sands has achieved.
"It is half the size in Vegas of its rivals but is trading at multiples of three times its earnings because it won licenses in Singapore and Macau," he continued. "The bigger rivals are thinking, ”˜I want a piece of that.’"
Another senior industry insider said the changing casino landscape in Great Britain will appear to the big operators.
"The UK is looking like the most liberalized market in the world with a low tax rate and 80-odd new casinos coming to market in the next 15 months," he said, adding that some British gaming companies that might make takeover targets are Ladbrokes, Gala Coral, Rank, William Hill and Tote.
The liberalization of the British market will be fueled by the Gambling Act, which comes into full operation next year. That’s when casino firms can advertise on television, which will inevitably lead to a surge in visitors, according to industry experts.
Then there is the prospect of a surge in the number of venues. Although the Gambling Act capped the number of new-style licenses to 17, including one super club, the industry has been busy applying for casino licenses under the old act. Thus by 2008, there could be 230 casinos in Britain — an increase of 90 in five years. It will mean the 55 billion pounds currently wagered by Britons on all forms of gambling will edge up to 60 billion by 2010.