Sun International planning £150m Scots casino complex

In anticipation of a relaxation of gaming laws, the company told The Scotsman yesterday that it was looking to build a multiplex with a casino, restaurants, fast-food outlets and bars.

Peter Byrne, executive director of Sun International (UK), said: "Scotland is a big market. While there are casinos already in Scotland, they are very small affairs. They do not have the range of facilities."

Byrne said he was looking for a brownfield site around either Glasgow or Edinburgh, and was in talks with Scottish Enterprise on a possible location.

Sun, which reported revenues of 380m for the 2003/4 financial year, is Africa’s leading hotel and leisure group. The group boasts resorts throughout southern Africa, including the renowned Sun City.

A keenly awaited bill, aimed at deregulating the gambling industry, will prove pivotal to Sun’s Scottish plans.

Merrill Lynch analyst Ian Rennardson said the bill, which is expected to go before parliament in the autumn, would transform the UK into an area of "fantastic opportunity for every company in the world".

The bill could be enacted by the end of 2005.

Under the proposals in the draft, gamblers would no longer have to be members of a casino before entering the premises, alcohol licensing laws would be relaxed, there would be fewer restrictions on casino venues and up to 1,250 slot machines allowed.

Byrne said that while the casino would be the "engine room", it was the slot machines that would bring in much of the revenue.

Taxation, however, remains an issue to be resolved, and Chancellor Gordon Brown is expected to make an announcement on this in his November pre-budget speech.

The larger casinos currently pay 40 per cent of their winnings in tax. Byrne said this, in effect, prevented a return on investment.

Buoyed by the relaxation in the government’s stance towards bookmakers, casino owners are hoping for similar provisions, which, Byrne estimates, could attract 2.5-3 billion in inward investment into the UK as a result.

"Casinos are asking for the same tax regime as is given to bookmakers," added Merrill Lynch’s Rennardson. "Bookmakers pay 15 per cent [on winnings] but [casinos say they] could live with 20 per cent."

Already, a number of cash-rich foreign companies are waiting in the wings to invest in the UK. Sun would be following in the footsteps of Kerzner International, which recently announced plans to invest 162m in a similar complex based at the Scottish Exhibition and Conference Centre in Glasgow, while MGM Mirage has unveiled similar plans around Glasgow Harbour.

Las Vegas Sands has revealed plans to build a casino complex near Rangers FC’s Ibrox Stadium, while the US group, Harrah’s Entertainment, has also toyed with a Scottish investment in Dumbartonshire.

Developers say that only a small percentage of the tabled plans will come to fruition.

Not everyone welcomes the prospect of casino multiplexes in Scotland. Paul Waterson, chief executive of the Scottish Licensed Trade Association, says: "Casinos are linked into alcohol, and they would further exacerbate the [drinking] problem we have in Scotland".

"There are too many licences," he adds, "which lead to a downward pressure on price from competition. These complexes have to be looked at as entertainment centres with alcohol."