Guernsey's chief minister admits the tendering process for the island's first casino should have been handled differently.
It is feared several hundred thousand pounds of taxpayers' money has been wasted, now plans for St Pierre Park Hotel look unlikely to go ahead.
Deputy Laurie Morgan says the money could still be recouped if other developers bid for a casino licence.
Tom Scott, the businessman behind the project, says it is no longer viable.
It follows stalemate over the terms of the licence, after Mr Scott's request to scale down plans from £25m to about £15m was rejected.
Now the States will look at whether there is still demand for a casino.