Small casino operators have failed in their High Court challenge against plans for 17 controversial new regional casinos to be build across Britain.

The government had said the challenge was without merit and Mr Justice Langstaff today ruled against the challenge on all counts.

May's High Court hearing was aimed at establishing whether the act discriminates against existing operators, who are allowed far fewer gambling machines than the 17 new venues will have.

Included in the proposals is the controversial plan to erect a Super-Casino in Manchester - something that has outraged anti-gambling campaigners, who say that it will trigger an increase in alcohol and gambling problems.

The plans have come about to take advantage of The Gambling Act, which comes into effect in September, and will deregulate the casino industry.

The government has taken a divisive stance on the matter, saying it will go ahead with its policies, even though Peers rejected the casino plans earlier in the year.

The locations chosen to have the new larger regional casino are Leeds, Hull, Great Yarmouth, Middlesbrough, Milton Keynes, Southampton, Solihull and Newham, in London.

Smaller casinos are proposed for Bath and North East Somerset, Dumfries and Galloway, East Lindsey, Luton, Scarborough, Swansea, Torbay and Wolverhampton.

The Evangelical Alliance has said it strongly condemns proposals to use casinos for regeneration as ineffective and unethical.

The alliance, which represents more than 1 million evangelicals in the UK, maintains that there is no public demand for more opportunities to gamble, and that local authorities have been seduced by "glitzy schemes" which offer only a short-term boom followed by long-term decline.

In the Lords debate, the Archbishop of Canterbury said he found the coupling of gambling with regeneration to be "quite baffling".

"I wonder whether the undoubted enthusiasm of some local authorities for the presence of casinos in their midst has something to do with the absence of other viable forms of regeneration policy proposed to them," he said. "Institutions that can encourage criminality and intensify irresponsibility are poor allies of social and civic regeneration."

He also voiced concern over assurances from the Government to assess the social impact of the casinos, saying, "The very language of 'test of social impact' fails to take seriously enough the fact that social impact is not something which comes and goes within 24 hours or which can be written out of the record by another piece of research.

"It also gives the unfortunate impression of business being somewhat unduly hustled in the parliamentary procedure."

Dr Marijke Hoek of the Evangelical Alliance's Greater Manchester Fellowship said: "Sitting a casino in one of the most deprived areas of Manchester presents a disproportionate risk to the local population, as experience shows that casinos are supported on a year round basis by regular local gamblers among whom problem gambling rates are higher."

The Methodist Church has also expressed its concerns about the introduction of casinos.

Anthea Cox, Methodist Coordinating Secretary for Public Life and Social Justice, said the Lords' vote "shows the extent to which many people are unhappy with the plans for new casinos for a variety of reasons, but it will only delay and not prevent them from being built".

"Britain's churches must continue to keep pressure on Government, regulators and operators to ensure that people are aware of the real risks of gambling, and to support those whose lives suffer as a result of gambling."

Gareth Wallace, Parliamentary Officer for the Evangelical Alliance, said the EA has worked on the Government's gambling proposals since the Budd Report in 2001. The EA has consistently pointed out the dangers of placing casinos in deprived areas, and has given evidence to the Joint Committee on the Draft Gambling Bill in 2004.

He pointed to a New Statesman article in February 2007 which featured a recent study from the University of Illinois stating that for every $46 of economic benefit from tax revenues and local regeneration there is a staggering $289 in social cost such as alcoholism and family break-up.