THE Sefton Group, owners of the Palace Hotel and the Isle of Man's only casino, criticised the government for promoting the creation of a second casino on the Island in September.

It followed the Department of Economic Development seeking "expressions of interest related to the issue of a second casino licence".

A statement released by The Sefton Group said: "There is no realistic prospect of two casinos operating profitably or of a second operator doing so without affecting the viability of the first.

"This has been pushed forward without a proper assessment and understanding of the local market."

Chief executive Brett Martin said: "We will be asking government to reconsider this approach and undertake the financial due diligence before proceeding further."

The government's pursuit of a possible second casino licence holder, together with a 5-star hotel, is seen as an attempt to stimulate tourism and bring additional revenue into the Isle of Man through taxes.

The department said it was "expecting a large amount of interest" in the proposal.

But the Sefton Group added: "We understand and respect that it is the will of government to examine the viability of a second licence but we have been urging that a comprehensive financial review be undertaken as the first step. Our disappointment stems from the fact that this has apparently not been done."

Sefton chairman Sir Miles Walker said at the company's annual general meeting in August that the Isle of Man market was "simply not big enough to sustain two casinos."

He added: "The UK gaming sector works on a population of approximately 400,000 per casino and, even allowing for visitor traffic, there is no equivalent of two casinos co-existing with a catchment population as low as the Isle of Man's.

"The added condition put forward by government that the granting of a second licence should not impact detrimentally on the current licence holder is unrealistic.

"The market is both small and mature, with 45 years of casino operation, and there is no reason to believe that a wholly new market would emerge if a second licence was granted."

Update: In November the Department of Economic Development published further information for parties interested in establishing the Island's first five start hotel and casino. For more on this story click here.

This story is part of isleofman.com's Review of the Year 2011.