Gambling: Place your bets, please

Still they play. A dozen people, mostly of retirement age, are gambling quietly at the Castle Casino, the largest in Blackpool. It has concrete battlements and two dozen gaming machines. But the borough council believes the only way to save the Lancashire resort from "terminal decline" is to build a new super casino containing more than 1,000 machines.

Another 46 towns and cities across the country want to do the same, but there is only one licence available, for now. The Gaming Act introduced a year ago allows for a single Las Vegas-style gambling palace. Friday was the deadline for bids to the Casino Advisory Panel, which will announce the contenders on Tuesday. The winner will be declared at the end of the year. Even critics of the scheme concede that the prize will generate thousands of jobs and millions of tourist pounds.

Blackpool needs them more than most. If the place were a punter it would be a former high-roller who had chums hanging on both arms when he was winning, back in the golden age. Now the punter is down on his luck, tatty and friendless and broke, watching the last pennies disappear into a slot machine and wondering where it all went wrong. "We cannot go on as we are," says Steve Weaver, chief executive of Blackpool Borough Council. Visitor numbers have fallen disastrously. Those who come spend less and leave earlier. Hotels are only 27 per cent full. "The casino is the answer."

Britain has become a gambling nation, seduced by the Lotto, Euromillions, scratchcards and bingo, not to mention the latest craze, poker. A home kit with card mat and chips was one of the biggest selling presents last Christmas, and Britons wager £3m a day on internet poker. Last year £1.78bn was bet on bingo and £4.16bn exchanged for gaming chips in 138 casinos.

The taste is there for a punter's paradise where people can play poker, blackjack and roulette, plus 1,250 slot machines with unlimited jackpots. The home of the super casino will be the UK's Las Vegas. Just as Vegas rose from the desert, a new resort will be born from nothing. Or reborn, in Blackpool's case. The town has three casinos, 60 betting shops and 6,000 slot machines, so it knows all about the attractions and dangers of gambling. That is one reason why it is ahead of its rivals in this race, with the Millennium Dome and Birmingham NEC on its tail and Cardiff, Coventry, Glasgow and Manchester hugging the rails. There are another 40 in the field.

There may yet turn out to be more than one winner. Originally the Government wanted to give out dozens of licences. It cut the number to eight under pressure from backbenchers and charities worried about creating an army of gambling addicts. One study estimated that a super casino could cost the winning city £61m in increased social services, addiction counselling and crimes including fraud, as the desperate lied and stole to finance debts.

When the Gambling Act ran out of parliamentary time a year ago, the Conservatives agreed to push it through on condition that the number of super casinos was reduced from eight to one. But last week the Chancellor announced a tax of £5,000 a time on machines in this new "regional casino", bringing the Treasury £6.25m a year.

The industry is betting such a plump cash cow will not be milked alone for long. The Act does not come into force until next year, but the Secretary of State for Culture, Tessa Jowell, could still allow eight super casinos without having to pass a new law. There have been heavy hints that this will be done, "if the mood is right". Some experts suspect an announcement may even come as early as Tuesday.

Whatever the number, Blackpool will still be favourite. "We are in a strong position," says Mr Weaver, "but we are not complacent at all." They can't afford to be. Blackpool's cheap-as-chips, kiss-me-quick image could not save it from cheap foreign package holidays in the sun. Most visitors now are old enough to remember riding donkeys on the sand between the wars. The others are gaggles of lads and lasses out on the lash, the hen and stag parties that buy "tit tassels" and poppers from the tat shops on the seafront.

Every resort in the country wants high-spending middle-class customers who will keep posh restaurants and hotels going, but they make up only eight per cent of the 11 million visitors. It is easy to see why. The walk from the station to the wind-lashed front goes through a subway puddled with urine and past empty shops, with unread post piling in doorways to match the litter on the street.

Mr Weaver has no illusions. The licence will go to the place that needs it most, so he points out that many of the old b&b places with legendarily fierce landladies are being replaced by flats and hostels occupied by benefits drifters. More than 40 per cent of people living behind the seafront do not work, being sick or unable to get a job. Blackpool men have the fourth lowest wages in the country, the third highest rate of alcohol-related deaths, the second lowest life expectancy.

There is a grand plan. The seafront is to be landscaped with Spanish steps and surreal sculptures. The trams, illuminations and tower, all icons of Blackpool's heyday, will be reinvented as symbols of its renaissance. The town centre will be rebuilt, with venues where the best performers will want to play. The airport will enlarge to fly visitors to a new lively, confident resort that is "embracing physical and spiritual change". But almost everything in the glossy brochure depends on the arrival of a super casino: one at first, then a cluster of three or four modelled on the punter palaces of Las Vegas.

Mr Weaver's eyes light up when he describes a visit there. "It is just unbelievable, the scale. The foyer of the casino I stayed in is bigger than our council offices. The eight restaurants are Michelin-star quality. One has 21 real Picassos on its walls. Phenomenal. It's the quality, the style, the pizzazz we want."

It is also - to use the jargon - the generosity of the public realm. That means there are things to see and do and marvel at in public spaces, that cost no money at all. "The fountains are like a show, every 15 minutes, lit up and done with music. Each big resort complex has a similar show: Treasure Island has a life-size pirate ship, the Mirage has a volcano."

The developer will be required to build a new arts and conference centre worth up to £110m and help fund regeneration projects. Between 2,500 and 3,400 jobs will be created, and a local college is already running courses for croupiers and gambling machine engineers. So what happens if the casino does not come? Mr Weaver smiles, shakes his head and asks for the tape recorder to be turned off. There there is no Plan B, it seems.

Even if they are successful there will be problems. Campaigners predict the Gambling Act will encourage a 40 per cent rise in the number of addicts; by the end of the decade the number will reach 700,000. In Exeter, one addict has just been jailed for stealing the £26,000 she needed to pay poker debts. "We went through a long period of heart-searching because, rightly, some people had concerns about this," says Mr Weaver. "We have convinced the majority, but we can't pretend there won't be anybody who is not badly affected."

The council is working with the primary care trust, social services and charities such as GamCare. "There already are more opportunities to gamble here," says Alan Cavill, head of corporate policy for Blackpool, "yet our problems are at the national average. We believe our population is hardened to this sort of thing."

With so many blank faces staring at screens, the Castle Casino is more like a hushed internet café than the sort of place James Bond would parade his tuxedo. One young blade plays cards, a thin man with slick hair being hammered by the motherly woman next to him. But the most popular game is electronic roulette, for those shy of a live croupier. I fritter away money for two hours without noticing the time, but don't lose a fortune (the average spend is about £40). The place is open until 6am, but I want to see what else Blackpool has to offer. The manageress shrugs and says, "Good luck". And luck is what it comes down to, the future of this town. The council has taken a huge gamble, staking everything on winning the licence for the super casino. But then Blackpool has nothing left to lose.

What are their chances?

Odds above calculated in consultation with a range of gambling industry experts, based on the granting of one licence only by the Casino Advisory Panel. Other local authorities interested are:

20-1 Chesterfield, Dunbartonshire, Havering, Luton, Maidstone, Renfrewshire, Southend-on-Sea

50-1 Bolsover, Bury, Cannock Chase, Dumfries & Galloway, East Lindsey, Havant, Hertsmere, Leicester, Mansfield, North Lanarkshire, North Somerset, Restormel, Salford, Scarborough, Sevenoaks, South Lanarkshire, Stevenage, Tewkesbury