AMERICAN casino operators have reacted cautiously to the latest report on the future of gambling in the UK.

Limits on the number of slot machines and a decision to push new casinos into regeneration areas have been identified as threats by Las Vegas companies considering a move into the British market.

Blackpool's bid for casino regeneration is also threatened by the 40 per cent tax rate on gambling profits, which companies say is too high.

MGM Mirage warned that it may have to scale down its casino plans, which include a £150m development in Newcastle, with limits on slot machines cited as a particular problem.

European managing director, Lloyd Nathan, warned: "The recommended numbers may have an effect on the level of investment an operator might make and the resulting characteristics of any casino complex that might evolve."

Harrah's, which is teaming up with bingo giant, Gala, for its UK operation, was more optimistic, saying the report was 'not a setback' to its plans. But another leading Las Vegas player said he would not join the rush to develop British casinos.

Steve Wynn, of Wynn Resorts Ltd, said: "When people say the UK is the market with the biggest upside, it's simply not true.

"I've always been a little sceptical about the UK, and I've always thought casino prospects in London were a bit murky."

He warned that the new laws would not change demand for gaming, already served by existing casinos, and also warned of the UK's planning law restrictions.

"You end up having to refurbish an existing building," Wynn added: "I don't think gambling in and of itself is an attraction (any more). The non-casino energy of Nevada resorts, with their shopping, dining, entertainment and fanciful environments, is their real attraction."

Blackpool's gambling revolution may also face pressure from other major cities in the region. Casino plans are already being considered for developments in Manchester's Eastlands area, while another consortium wants to build a casino alongside a new Salford rugby league stadium. Other operators are said to be considering venues in Liverpool.