Glasgow has lost out in a bid to be the location for Britain's first super-casino.
Glasgow was in second place after the first round of judging
The Casino Advisory Panel (Cap) recommended Manchester be awarded the regional casino licence.
Glasgow council leader Steven Purcell said the decision was a disappointment and criticised the Scottish Executive for a lack of support.
The panel recommended Dumfries and Galloway be granted a licence for a smaller casino.
Small casinos can be up to 750 square metres and house up to 80 of the £4,000 maximum jackpot gaming machines.
The Dumfries and Galloway casino is expected to be built in Stranraer.
The super-casino in deprived east Manchester will bring with it some £265m investment and up to 2,700 direct and indirect jobs.
Up to 1,250 unlimited jackpot gaming machines will be housed on a 5,000 square metre site.
Announcing its support for Manchester, the Cap said it was "... extremely impressed by the city's proposal, which offers great promise".
Glasgow City Council proposed four sites for a super-casino. Mr Purcell criticised a lack of support from the executive and said their backing would have made a difference.
When Glasgow launched its bid, the executive failed to explicitly back the attempt, saying it was up to local councils to decide what was best.
An artist's impression of the casino complex planned for Ibrox
Mr Purcell said: "I have no doubt that stronger support from the executive would have made a difference to the bid."
He added: "Fortunately, our strategy for growing Glasgow as a major tourist destination was never solely dependant on winning the casino licence."
The local authority said it would not contest the decision and would focus on bringing the Commonwealth Games to Scotland in 2014.
Professor Stephen Crow, chair of Cap, told BBC Scotland a lack of support from the executive was one of the reasons Glasgow was not selected.
A spokesman for the Scottish Executive said: "Ministers agreed in September last year that they were not opposed in principle to new casino developments in Scotland, subject to there being significant demonstrable regeneration benefits and appropriate safeguards to mitigate the potential negative impacts.
"They believed that local councils were best placed to weigh up the pros and cons of new casino developments in their areas.
"Furthermore, it would have been inappropriate for ministers to comment on the merits of specific bids because ministers may become involved in later planning applications."
Scott Taylor, chief executive of Glasgow City Marketing Bureau, said: "This is disappointing news but won't hold us back in the drive to increase tourism to Glasgow by 60% over the next 10 years - generating an additional one million visitors."
Dr Lesley Sawers, chief executive of Glasgow Chamber of Commerce, said Glasgow had put up a strong case.
She added: "Our new, confident Glasgow won't be deterred by this decision.
"We wish Manchester every success."
Ian Davidson, MP for Glasgow south west, said he was relieved Glasgow had failed in its bid.
The Labour MP said he was never convinced the benefits of investment in the area would outweigh concerns about it increasing problem gambling.
Bill Aitken, Scottish Conservative MSP for Glasgow, said the decision was a blow for Glasgow.
"The city will now need to try even harder than we are at present to get the Commonwealth Games to come to Glasgow in 2014 and in this respect I am upbeat we'll get a result," he added.
Liberal Democrat MP Jo Swinson said the decision was correct.
"Problem gambling, like drug and alcohol addiction, is at the heart of social problems affecting Glasgow and the west of Scotland." she said.
"Building a regional super casino in Glasgow would have risked setting back efforts to combat these problems."
Green MSP Patrick Harvie said: "I'm pleased that Glasgow has been spared a super-casino this time but it is still a threat in the future."