On a damp, cold Friday night, the Grosvenor casino in South Kensington is a dispiriting place to be. A low-ceilinged, smoky room beneath a hotel, it is more minimum-wage than Mayfair ­ a place of chipped ashtrays, cheap wine and cigarettes at £6.20 for 16, of apparently joyless gamblers and a lone granny plugging away at the Lucky Lady fruit machine. Casino Royale it is not. The Grosvenor is probably what most people in Britain think casinos are like; perhaps not coincidentally, only about 2 per cent of the population has set foot in one. But that may be about to change ­ if an altogether different casino housed in Manchester city centre is anything to go by.

Manchester235, which opened late last year, is owned by Harrah's Entertainment, the biggest gaming company in the world, which also owns Caesars Palace in Las Vegas. 235 is, they say, a complete night out,

Vegas-style: drinks, dinner, live music and hey, if you fancy a flutter, great, but we really don't expect it. 235 is the start of the brave new world of gambling that will reach its zenith in the supercasino. The gaming floor sprawls over 22,000 sq ft; there are slot machines and roulette wheels and gaming tables, a smart restaurant upstairs and a casual Italian job on the ground floor.

The scene one night this winter, of 14 footballers' WAGs dressed up to the nines in hotpants and Chanel earrings, chinning champagne and attracting the local paparazzi, is the stuff of their dreams. But it's not all footballers' wives. Daniel Gore, 28, a roofer, won £22,000 on a £500 outlay playing roulette there three days before. His mate Jay Stapley, 20, a courier, is playing blackjack and reckons 235 is the best casino in town, "because it's chilled-out and full of lovely-looking ladies". Amanda Walker, 34, a TV producer, agrees that "it's glamorous. It's as close to Vegas as you're going to get".

Behind all the glitz is the prospect of serious money to be made ­ by companies such as Harrah's, not to mention Her Majesty's Government. For if the launch of the National Lottery in 1994 marked the start of state-approved gambling ­ turning more than twothirds of the adult population into gamblers overnight ­ the 2005 Gambling Act has taken it further.

There are 139 casinos in the UK. The new act granted licences for eight new small ones of up to 8,000 sq ft, eight large ones of 16,000 sq ft and one "supercasino" ­ a gamblers' paradise spread over up to 50,000 sq ft, with unlimited jackpots on up to 1,250 gaming machines. (Large casinos can have up to 150, and small casinos 80, with a maximum prize of £4,000.) In January, the supercasino was controversially awarded to East Manchester, down the road from 235, rather than Blackpool, which had pinned its hopes on becoming the Fylde's answer to Las Vegas. At the time of writing, MPs ­ many of whom were vocal in their disappointment about the choice of Manchester ­ were set to debate the issue and could decide to throw out the plans for all 17 casinos.

About 70 per cent of casino-goers are men, mostly in the 18-35 age bracket, though the number of women is rising, partly because the strict entry requirements mean it's seen as a safe night out. But while some of the Bill's opponents were anti-gambling on principle, others argued that it is just another form of entertainment, and that people should be free to spend their money in any way they choose.

That 40 per cent of casino profits would go to the Treasury (and it was announced in the recent Budget that would rise to 50 per cent) could possibly be a factor in the Government's pursuit of liberalisation. But Tessa Jowell, who as Culture Secretary has the task of pushing through the new legislation, has also argued that "there's a whiff of snobbery in some of the opposition to new casinos. People who think they should remain the preserve of the rich; others who find them gaudy and in poor tasteŠ They are entitled to those views, but they are not entitled to force them on others." The act's measures also included regulation aiming to enforce "socially responsible" gambling, such as requirements to offer assistance to problem gamblers and to protect children. While the casino market has been undersupplied in the UK, online gambling has grown exponentially, now accounting for about a quarter of the total £53 billion gambling spend in the UK. Supporters of casinos argue that it's better for people to gamble in strictly regulated areas where support is available if you get into difficulties, rather than at home, alone. According to Professor Collins, director of the Centre for Gambling Studies at Salford University, "unregulated internet gambling is much more of a worry from every social point of view than one casino that's medium-sized, by international standards, in Manchester".

Andy Orr is the director of the £30 million Manchester235. Orr has a background in supermarkets and had never set foot in a casino until he joined 235. He talks so much about his "social responsibility training" and free hotlines to gambling charities that you could be forgiven for thinking you were talking to a social worker, not a casino manager. "We don't want someone to come in and lose the shirt off their back," he reasons. "We want them to come in, enjoy themselves, and come back." As casino host David Kelly, 28, says, "Here there's not so much emphasis on gambling. It's more socialising." Rob Anderson, 33, a chemical engineer from Manchester and a member of several Manchester casinos, would seem to agree. Manchester235 is, he says, "the first casino that you'd come to on a night out, not just with your mates to have a gamble. You could come and have a nice meal and a few drinks". "You can just relax and listen to the band," says his girlfriend, Emma Edgar, 25. "It's our fourth anniversary, so we went out for dinner, then came on here." While the operators of the new style of casinos are out to make a night out under their auspices look glamorous, the Government is keen to talk up how this new wave of casinos could contribute to urban regeneration. East Manchester is an area where Midas, Manchester's investment agency, says 50 per cent of the population is "economically inactive and totally dependent on the state", and where life expectancy for men is seven years less than the national average. But will the casino benefit them, as the Government promises? The talk is of jobs in construction and, later, the hotel, restaurants, bars and arena that are planned. Manchester's bid organisers have promised a £265 million investment and 2,700 direct and indirect jobs.

All well and good, but according to Professor Collins, it's not unknown for developers to renege on the low-cost housing, or whatever worthy project they used to help win them the licence. "They tend to over-promise. Once they've got the licence and started hiring people they say, ŒAre you going to make us put all these people out of work?'" The solution, he believes, is stringent penalty clauses in the contract: doubly crucial because, he says, it's not the casino per se that creates jobs or regeneration.

"It's all the other things the casino companies are prepared to do to win the licence. It's a way of harnessing the creativity of the world's most successful entertainment, tourism, gambling and hotel companies, so they spend their time scratching their heads and thinking, ŒWhat can we do that will be really good for Manchester?'" And the regeneration money comes not just upfront from the casino owners building hotels and arenas, but in tax.

"I reckon in Manchester there's going to be somewhere between £150 and £250 million of regeneration available," says Collins. "The returns on a first-rate conference centre or five-star hotel aren't big enough to warrant the risk for private enterprise to do it, but a casino company might be prepared to take a nil return because it will make their project more attractive to the licensing authority." So on the whole supercasinos are a good thing? Collins thinks the answer is

Times recommends

• Are eldest children really a cut above?
• Peaches Geldof: censored
• Top 10 style-setting films of all time