Gamblers like to bet on an uncertain outcome, even though they know in the long run the house always wins. Investors in the UK's casino operators may feel the same.

Shares in Stanley Leisure and London Clubs International continue to be buoyed by hopes of a bid or merger engineered by their largest shareholder, Malaysian conglomerate Genting Berhad.

A merger is not impossible, although it would raise competition issues. Genting's recent upping of its LCI stake to just under 30 per cent, compared to its 20 per cent of Stanley, suggests it is viewing LCI more hungrily. But as time goes by, Genting looks less like a potential buyer and more like a long-term investor, interested in the upside that gambling deregulation will bring. The benefits, although potentially substantial, still look too nebulous to underpin Stanley's current valuation, although net asset value does. Stanley is planning to upgrade its facilities to take advantage of the rule changes, but it will be up against the other operators in the race for the one super-casino which the legislation finally allowed. And no-one knows just how many new casino visitors deregulation will bring.

Investors have enjoyed a nearly 40 per cent upswing in Stanley's share price over the last year and will get a handout worth 250p a share in September from the sale of its betting shops earlier this year. If Genting does not put its cards on the table by then, they may be inclined to quit while they are ahead.

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