Gala is looking for a big pay-out from Dundee City Council to quit its waterfront gaming site and that is why it is one of only three casinos that the company is not selling to the rival Rank Group.
Rank is buying the Gala Casino business from the Gala Coral Group for £205 milion, making it the largest casino operator in the UK.
The sale does not include the Dundee waterfront site the subject of compulsory purchase proceedings by the city council.
The local authority needs the Gala Casino and neighbouring Hilton Hotel to make way for the £1 billion redevelopment of the landward area west of the Tay Road Bridge.
Rank already has a presence in Dundee with the G Casino in West Marketgait.
Asked why Gala did not also sell the waterfront casino to them, a spokeswoman said: “We decided to keep the casino as Rank already have one in Dundee and there is uncertainty regarding the redevelopment of the area. Therefore for both reasons we decided not to sell Dundee.
“We hope to be able to negotiate a payment from the council that will enable us to move our casino to a new location and protect the jobs.”
The spokeswoman would not comment on the outcome of a meeting between staff at the Gala Casino and a company area manager this week, following the takeover announcement and the exclusion of the Dundee outlet from the deal.
A spokesman for Dundee City Council said: “Negotiations are still ongoing regarding the acquisition of the Gala Casino and Hilton Hotel.”
The Courier reported in February that the waterfront redevelopment had been hit by a significant obstacle as a result of the Hilton Hotel and the Gala Casino refusing to vacate their adjoining sites unless they are offered more money by the council.
They stand on 1.26 hectares of land which is leased from the council. However, the council wants it back for public open space and infrastructure works for the redevelopment.
The council’s wishes have been known to all interested parties since the waterfront project was agreed more than a decade ago and there have been protracted negotiations between the authority’s property consultants Jones LaSalle and Hilton Worldwide and the Gala Coral Group, but no agreement has yet been reached to compensate them for the surrender of the leases.
There is understood to be a considerable difference between what the council is offering to buy out the remainder of the leases and what the hotel and casino are willing to accept.
As a last resort the council decided to pursue a compulsory purchase order (CPO) for the return of the land under the Land Compensation (Scotland) Act for a fair market valuation by an independent arbiter.
It is believed the legal process to gain the order will take years rather than months, but the council was advised to make the move without further delay to allow the overall waterfront project crowned by the £45 million V&A museum to be completed as scheduled by 2031.
Both Hilton and Gala stress that their hotel and casino remain open for business while the CPO is being pursued.
The purchase of Gala Casinos by Rank is expected to be completed in the third quarter of the year and remains subject to shareholder approval and clearance from the UK’s merger control authorities.