HOPES that Blackpool could gain exclusive pilot status to develop resort casino hotels received a body blow from central Government.

Blackpool Challenge Partnership, of which Blackpool Borough Council is a leading member, had hoped the town would be able to develop resort casinos exclusively as part of a pilot project springing from gambling law reforms -- without competition from other UK resorts.

But yesterday's publication of the Department of Culture, Media and Sport's select committee on gambling reform put paid to Blackpool becoming the UK's sole answer to Las Vegas.

The report did state that the Government's proposals would allow the development of large leisure resort premises of the type seen in Las Vegas and Atlantic City offering accommodation, entertainment and conference facilities as well as gambling.

But it continued: "Blackpool Challenge Partnership claimed that resort casinos would bring in investment to the economic infrastructure of Blackpool that would save the resort and the region from the degeneration that it was currently suffering.

"The Partnership was keen to see the Government phase deregulation of casinos and allow Blackpool to have pilot status in the development of resort hotels.

"Neither the Gambling Review Body nor the Government considered that there was a case for granting preferred or pilot status to any particular area."

Resort casinos are likely to bring economic benefit through business rates charged and visitors being attracted all year round, the report said.

But the select committee had noted the concerns of local action groups who were worried about the potential for "devastating" economic impact on small hotels and boarding houses.

The report added: "There is no likelihood that Blackpool, or other resorts, would be able directly to tax a resort casino in order to invest in the regeneration of their town -- as had been the case in Atlantic City and Biloxi in the United States.

"We agree with the Government that pilot status should not be given to a particular area. We consider that it will be for local authorities to develop the most beneficial strategy for licensing and approving planning for resort casinos and to align, as the Local Government Association suggests, new gambling facilities with other business, cultural or social housing developments so that resort casinos contribute to the area in which they are built."

But Blackpool Borough Council yesterday remained optimistic, despite knowing any resort casinos could be in competition with other resorts in the UK.

A council spokesperson said the select committee had wished Blackpool well and said the town's "advanced thinking" would enable them to use resort casinos as "a driver" for regeneration.

And she said the committee had accepted, in line with Blackpool's proposal, that planning legislation needed to be changed to identify casinos as a special case, and that money needed to be ring-fenced to ensure local authorities could meet the cost of administering the licensing process and increased demands on social and health services.

Steven Weaver, the council's chief executive, commented: "We are pleased that many of the points we raised with the committee have been taken on board.

"It is, however, important to stress that this is only one stage in a long process and work will have to continue if these and other changes Blackpool is looking for are to be included in the final legislation."