As reported by: Associated New Media
Government plans to allow Las Vegas-style casinos were mired in fresh controversy today amid claims that American gambling giants were offered secret tax deals to locate in Britain.

Speculation that secret tax discussions had been held was given added weight when it emerged that Labour MPs had been sent a briefing suggesting the Gambling Bill would be "revenue neutral for HM Treasury".

A Las Vegas newspaper claimed Mr Fahrenkopf had been given assurances on tax by unnamed officials during a visit to Britain in January to give evidence to the Joint Parliamentary Committee on the Gambling Bill.

American companies are used to far lower levels of taxes on gaming than in the UK, with rates as low as eight per cent in Atlantic City.

But the US casino chief today denied the claims. "Tax rate's got to be lower, but that tax rate has to be set by the taxing authorities," he said. "No commitment was made to me by any MP or any member of the Blair Government that there was going to be a reduction.

"I recommended that there be a reduction from present rates, but I got no commitment from the Government. There were no secret meetings or secret arrangements."

Although Government spokesmen played down reports of Cabinet splits, the Treasury was furious about the speculation. Chancellor Gordon Brown is sceptical about the proposed revolution in gaming laws. Deputy Prime Minister John Prescott wants tough planning restrictions, while Home Secretary David Blunkett has fears about increased organised crime linked to gaming.

Culture Secretary Tessa Jowell hinted in an interview that she was prepared to make concessions on the Gambling Bill, which returns to the Commons next week.

Instead of the touted 96 " megacasinos", no more than 40 would be created, she said. Local residents would be given the final say through their local planning authority.

But Ms Jowell is determined to press on with her plans, stressing that they will not open the floodgates to US-style gambling and will create 80,000 jobs.

A briefing paper for Labour MPs was sent last week by Nick Bent, Ms Jowell's special adviser: "The Bill will be revenue neutral. Revenue generation is emphatically not an objective of this Bill."

But the note was written without the authorisation of the Treasury. Making the plans "revenue neutral" would mean the Chancellor losing millions of pounds in extra tax income expected from the new casinos.