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25/09/2001 No.11
he Good Gambler
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The Genie has one wish left, an honourable death

With the world of gambling erupting in the British Isles, at least in the minds of those wishing to exploit it, poor old Alan Goodenough and Richard Goeglein are wishing that they had not strayed from these shores.

The water looked so warm and the gold so real but it was all just a mirage in the desert, though ironically not The Mirage. Alan Goodenough was chairman of London Clubs (LCI) the owner of 7 London casinos with 3 provincial clubs set to open in 2002. In 1997 he had a vision along with his board members to cash in on the apparently never ending growth in Las Vegas through the 1990s. He, his company and a New York investment trust, bought the old Aladdin Casino on the strip. They knocked it down and rebuilt it.

What all good traders know is that when the general public get in, its time to get out and its a sure thing that people at board level in casino organisations are as general public as you get when it comes to novel investments. They arrived when the best was getting out, Steve Wynn the Mirage creator. They never had a prayer, let alone a wish and when building costs soared to $1.4 billion and the Investment Trust refused to pay their side of the debt, it was practically over before it started.

It did start though, 11 months ago and from the beginning it struggled to show a profit. Re-designs and cost cutting patched the leaking ship but when the terrorist panic hit the USA in early September 2001, the Genie was dead. Alan Goodenough went months earlier and Richard Goeglein, chairman of the Aladdin Group in Vegas, went a few days ago. The Aladdin is expected to file for chapter 11 bankruptcy within weeks, which prevents its creditors from forcing sale of assests for quick repayment of debt.

That leads us back to the Isles of Britain where Vegas based MGM have just bought an Internet Casino license in the Isle of Man. With them are Sun International from the Bahamas and Littlewoods Leisure. Littlewoods are trying desperately to get back into the big time since the lottery took away most of their pools customers. Their parent company Sportech Ltd want to buy their way back with bookmakers and casinos, land and cyber-space based. Its a tough market with big players, they may not make it. The football pools maybe in more trouble as the Tote move to take Premier Division football bets on individual games, breaking ranks with all the other bookmakers who traditionally force punters to place at least a 'treble'. It will not be long before all the others follow suit and with the abolition of betting tax on October 6th, football betting is set to explode big time.

Lastly, another big player in the home market, Rank, not only want to buy Coral Bookmakers to rival Stanley's combination group, but are now looking to turn a third of their Bingo halls into casino-like operations. That would mean another 60 small casinos in the UK and Rank easily the biggest gambling operator since Ladbroke broke their empire by selling their casinos to Gala Bingo.