Manchester has been chosen as the site for Britain's first super-casino, a Las-Vegas style venue with up to 1,250 unlimited jackpot machines.
The independent Casino Advisory Panel said the city's proposals offered the best test of the social impact and regeneration benefits of the new casino, which could be followed by others in the future if it proves a success.
But the decision has come as a surprise, as Greenwich and Blackpool were the favourites to win the contest over rivals Cardiff, Glasgow, Newcastle and Sheffield.
Panel chairman Stephen Crow said all of the seven proposals "had their merits in their own way" and would benefit from the regeneration benefits expected to come with the creation of a casino, both in terms of jobs and visitors.
"We were, however, particularly impressed by Manchester's proposal, which in our view offers great promise," he said.
"We found that the proposal had a unique formula to offer which served to set it apart from the others presented to us in terms of the full range of our specific remitted criteria of best test of social impact, regeneration need and benefits and willingness to license."
Professor Crow said the size of the catchment area for a casino in Manchester was "second only to that of London", adding that, crucially, the city had the "greatest need in terms of multiple deprivation" of all the bids.
The City of Manchester is the third most deprived local authority area in England, with 20 per cent of residents claiming income support - twice the national average. In October 2006, unemployment stood at 3.9 per cent, against 2.5 per cent for the UK as a whole.
The super-casino is being built under terms of the 2005 Gambling Act, which also allows for eight large and eight small casinos. Their locations have also been revealed today.
Today's decision is likely to be welcomed by Manchester city council, but there are widespread concerns about the social impact of building the new casinos, in particular the effect they may have of increasing problem gambling.
A survey in today's Daily Telegraph finds 56 per cent of respondents believe the spread of casinos is a bad idea, and will bring social problems such as an increase in crime and joblessness to the associated area.
Just 30 per cent backed setting up casinos, naming the regeneration benefits they could bring to run-down areas and the increased tax revenues brought to the Treasury.
The Centre for Cities, part of the IPPR think tank, yesterday said Blackpool should win because it was most in need of the regeneration boost a super-casino would bring, saying Greenwich - the other favourite - already had the London 2012 Olympics.
However, senior researcher Max Nathan warned: "The evidence says big casinos deliver mixed blessings. They may not create that many new jobs, problem gambling is likely to increase, and the tax revenues will go straight to the Treasury."
The process of choosing a venue for the new super-casino was mired in controversy last summer when it emerged that the deputy prime minister, John Prescott, had met the man who owned the Greenwich bid site several times and had even visited his Texas ranch.
Large casinos are to be licensed in: Great Yarmouth; Kingston-upon-Hull; Leeds; Middlesbrough; Milton Keynes; Newham; Solihull and Southampton.
Small casinos to be licensed in: Bath and North East Somerset; Dumfries and Galloway; East Lindsey; Luton; Scarborough; Swansea; Torbay and Wolverhampton.
Read more responses to the announcement at issue of the day.