US-based casino operator, Harrah’s Entertainment, has been blocked in its bid to open a new site on Rhode Island – good news for UK gaming company Wembley.

Wembley – which operates the Lincoln Park site in Rhode Island – made a statement to the London Stock Exchange yesterday, saying that a state court had blocked Harrah’s referendum on whether it should be allowed to build a new casino on constitutional grounds.

While this is a setback for Harrah’s it is a boost for Wembley, as concerns over the prospect of a rival Rhode Island casino to Lincoln Park was a fundamental reason for the collapse of BLB’s £309m takeover bid for Wembley last month. The company generates around 93 per cent of its profit from the Rhode Island site.

In conjunction with the Narragansett Indian Tribe, Harrah’s proposed casino would boast 3,500 gaming stations plus a 500-room hotel, entertainment facilities, restaurants and convention space.

The company had been given a favourable tax regime by Rhode Island legislators – believed to be half that of Wembley’s Lincoln Park operation – as they were keen to see the casino built.

In June, state lawmakers approved legislation that guaranteed Harrah’s an exclusive casino license, as long as it won over the state’s voters.

However, governor Donald Carcieri has vetoed the legislation. It is understood that Harrah’s intends to contest the ruling.

Wembley is due to announce its interim results on 2 September.