The Palace Hotel and Casino could be on the move as part of major redevelopment plans.
The Sefton Group has signed a memorandum of understanding with Auldyn Properties Limited – the new owner of the Middlemarch site.
The group is the Sefton's largest shareholder and has recently purchased the site from government.
It plans to create a multi-use development with a new casino complex, third party leisure facilities and a multi-storey car park.
Chief Executive Officer Brett Martin says: "Our stated aim over the last few years has been to relocate our Palace Hotel and Casino operations to Lower Douglas.
"Auldyn Properties' acquisition of the Middlemarch site and our planned involvement in the proposed development is a welcome first step in a process that will likely see the casino operations relocate first, with a new hotel to follow at some point further down the line.
"In conjunction with Auldyn we hope to progress to the planning stage as soon as the car parking and other leisure elements of the development have been finalised."