An influential Lords' committee yesterday raised concerns over the whole selection process while Liberal Democrat peers have tabled a motion calling for the decision to be reconsidered.
A report by the House of Lords Merits of Statutory Instruments Committee said there had been a "general misunderstanding" by the Casino Advisory Panel (CAP) of its aims ahead of selecting Manchester as its preferred option. Lord Tom McNally of Blackpool, leader of the Liberal Democrat peers, today said: "It's a polite report which basically says the panel messed up and got it wrong.
"It raises sufficient doubts to justify the Lords asking the Government to think again.
"The fight's not over. We have one last throw of the dice."
The Lib Dem amendment seeks to split off the super casino decision from that of the other 16 smaller casinos which MPs and peers are being asked to approve.
They want the matter to be sent to a special scrutiny committee before any decision is made.
Manchester's shock choice as the location for the UK's first Las Vegas-style casino has provoked anger among many MPs and Lords ahead of next Wednesday's votes in both the Commons and Lords.
More than 120 MPs have signed an Early Day Motion calling for the selection to be reviewed.
Blackpool's lifeline centres on an original policy objective that the supercasino helps achieve the regeneration of the area in which it was sited.
The Merits committee report highlights inconsistencies in the findings of the CAP – crucially highlighting the regional casino could be built elsewhere in Manchester, rather than East Manchester which was chosen because it was deemed to be the best test of social impact.
Baroness Golding, who was a member of the original joint scrutiny committee on the Draft Gambling Bill, said: "It voices many of our concerns, especially the panel seems to have dismissed the idea of a destination casino.
"The biggest concern we had was to protect young and vulnerable people from the effects of gambling and dismissing a destination casino ignores that."
Blackpool's MPs Gordon Marsden and Joan Humble said the questioning by the Lords had uncovered many inconsistencies.
Mrs Humble said: "The Lords asked the key questions and highlighted the inconsistencies in the panel's report. It is also a worrying concern that the Government's interpretation of social impact was different to the panel's and yet the assessment of the social impact was they key test that they were using."
Mr Marsden added: "It all adds up to a department that failed to give decent guidance to the panel in the first place, and then when they got a perverse result, failed to give it further scrutiny.
"I believe this gives enough ammunition for people to vote against the order in both Houses."
Lib Dem culture, media and sport spokesman Don Foster said the report raised "a number of important concerns".
However, Culture minister Richard Caborn disagreed and said the location of all 17 new casinos would be put before the Commons next Wednesday.
He said: "I thank the committee for their report, but I take a different view to them.
"I'm confident the independent CAP's recommendations, which are based on 16 months of careful, objective analysis of the evidence, will provide a good test of social impact. This was the panel's key objective and they met it."
Alan Cavill, Blackpool Council's head of policy and development, said: "We hope that this report will help inform the debate in both Houses and that the Order will not be confirmed and the CAP's report will be referred to an expert scrutiny committee for further consideration."
But Manchester claims the Lords report has affirmed the strengths of its bid.
A joint statement issued by Manchester City Council leader Sir Richard Leese, and Manchester MPs Tony Lloyd and Graham Stringer, said: "The Sportcity site will be available for all bidders and the council will welcome applications for it."