PRINCE.EDWARD.ISLAND (CBC) - Kevin Murphy, owner of the Murphy Group of Restaurants, pulled his bid last week just as Atlantic Lottery was about to award the contract.

The three mini-casinos, known as Category B-1 sites, were part of a new gaming strategy announced earlier this year, in which VLTs would be available at fewer sites, but in larger numbers at those locations.

The B-1 sites were to have up to 25 VLTs each. Murphy's group submitted a bid to run those sites at Dooley's in Montague and Summerside, and at ISE's in Charlottetown.

But Murphy told CBC News the province changed the rules, putting a cap of 15 VLTs to start, rather than 25. Murphy's bars already have 10 VLTs, and he said the extra expense wasn't worth it for five more.

"What their requirements were for renovations and upgrades, it was a significant investment to become a B-1 site, and there was also significant ongoing costs to reposition it," said Murphy.

"We had to make more investment, so at this time we weren't prepared."

Murphy said it would have cost the company at least $150,000 to renovate each bar.

With no bidders, there will be no mini-casinos.

"ALC will not be placing any B-1 sites in the market in the immediate future," said Atlantic Lottery spokeswoman Courtney Pringle.

Pringle said Atlantic Lotto will reissue a request for proposals either at the end of this year, or early next year. Murphy said the terms would have to change for him to gamble on another bid.