Genting, Britain’s largest casino operator, have lost almost £130 million on its UK casinos, due to the rise in gaming duty and the smoking ban which has affected casinos and bingo halls up and down the country.
The company has reported a £129 million impairment loss against the value of the Stanley Casinos business it bought just over a year ago for £639 million, or £700 million including debt.
The company made a statement saying, “The impairment is largely attributable to the increase in gaming duty rates [from] April 2007.”
The company also said that the rise in duty, “took the UK gaming industry by surprise as it was made without any prior consultation and indication.”
The Malaysian owned firm was keen to point out, however, that falling profits have also been the result of the smoking ban in England which came into force in the summer. It isn’t clear how much profits have declined as a result of the duty increased, but it is thought to be higher than the £8 million predicted to be lost by Genting’s main rival, the Rank Group.
Stanley have a portfolio of 46 casinos which include Britain’s oldest, Crockfords in Mayfair. They contributed revenue of 376.3 ringgit in the third quarter of 2007.
It has 41 casinos outside of London, many of which trade under the Circus, Maxims and Mint brands.
When Genting bought Stanley Casinos last year, it predicted the company would be “a platform for expansion in the soon-to-be deregulated UK gaming industry.”
However, government plans to award 17 new casino licences under the Gambling Act have been delayed due to the controversy surrounding the single supercasino envisaged under the new legislation.
Genting also hoped to buy London Clubs International (LCI) a company which Genting had a 29.8 percent stake in. Although LCI was instead bought by Harrah’s Entertainment for £325 million, only a short while after Genting had bought Stanley.
Harrah’s Entertainment is itself due to be taken over by Apollo Management and TPG Capital next month for an estimated £13.5 billion. They have as yet not announced a writedown on the value of their British casino business.
