Fresh claims were made today that the closure of Leeds-based Alea Casino could have been prompted by a council demand for them to hand over 25 per cent of their takings if they won the Leeds super-casino contract.
Michael Ingall, Chief Executive of Allied London, which owns Clarence Dock, said the council’s handling of the bid process could have been better.
The property developer added that while he sympathised with Alea, he saw the closure as “an opportunity.”
Speaking to the Yorkshire Evening Post, he said: “There’s no doubt in my mind that had Alea won the licence, an enlarged and enhanced casino on that site would have been a fundamental part of the regeneration of Clarence Dock.
“This is an opportunity which has been greatly missed by Leeds City Council.”
In 2005, the Government gave Leeds a licence to run a super-casino and Alea, along with several others, entered into that process.
Until Monday, there were three potential sites - Alea, Elland Road and the Eastgate Quarter development, which was the subject of a late revised application in January.
That application was considered by Leeds City Council in February, much to the annoyance of Alea and its parent company, London Clubs International, which is ultimately owned by Las Vegas-based Caesars Entertainment Corporation.
Whoever wins the super-casino licence will be able to create a formidable gambling emporium.
Had Alea won, it would have been able to increase the number of slot machines it operates from 25 to 150.
However, the YEP understands Leeds City Council was demanding 25 per cent of annual takings for whoever won the super-casino bid.
In a statement, London Clubs International referred to “financial and other burdens attached to that licence are excessive” and “not sustainable”.
And in a letter handed to staff who turned up for work on Monday morning, Michael Silberling, managing director of London Clubs International, painted a damning picture of the club’s prospects, saying: “Five years ago, London Clubs created one of the largest, best appointed and best equipped casinos in the UK. Our ambition was the area would become a vibrant extension of the city centre and that more liberal regulations to casino gaming would quickly follow.
“Unfortunately, the regulations have not changed, competition from other forms of gambling has increased and the trading environment in Clarence Dock has yet to evolve to allow a business as big and costly as Alea to survive.
“During the application process we have come to the conclusion financial and other burdens attached to that licence are excessive, not sustainable and the immediate outlook for the business is very poor.”
The 99 staff have been given a month’s paid leave but were also warned redundancy is likely to follow.
Despite the cloud which now clearly hangs over Clarence Dock - soon to be rebranded as ‘New Dock’, owner Mr Ingall said he remained hopeful for its future.
“I look on all setbacks in life as an opportunity. I am disappointed Alea has decided they have to take this path but I sympathise with them. Leeds could have had the only stand-alone casino. You work out if they got it right or not.”
He went on: “This is a decision which will no doubt have been taken by the parent company of London Clubs international - it is a decision which will have been made in Las Vegas.
“They were very keen to win the new casino licence.
“It is my understanding Leeds City Council was asking for quite a hefty financial contribution from the casinos and one has to ask whether that is sustainable - clearly, the owners of Alea did not think it was.
“Clearly, there are other bidders who are prepared to give that to the council.
“One thing which I think has contributed to this is the late bid to have a large casino as part of the Eastgate Quarter, which was only made to the council on January 23 and only considered by a committee on February 12, which I think has annoyed some.
“That was the first thing. The second thing was I think Caesars have simply taken the view that if they did win, they would be paying too much to the council and, if they lost, whoever did win would put them out of business.
“When we bought Clarence Dock it was for the medium to long-term future in mind, I still believe it is sustainable.
“Gambling has such a massive impact socially and it’s such an emotive topic but the one thing I would say about that is, having said that, a casino in Clarence Dock worked.”
Mr Ingall said he was also disappointed to see the loss of two high profile names attached to the restaurants at Alea - James Martin’s Leeds Kitchen and the twice-Michelin starred Bird by Vineet.
He even hinted that efforts would be made to see those businesses continue elsewhere at Clarence Dock, saying: “We will see what we can do about that, we may be able to do something.”
He added: “Alea hasn’t closed because of the location - Elland Road is equally out on a limb - they have closed because they have taken the view it’s not viable.
“If they won the contract, they would have paid too much, if they lost, they would have been put out of business.”