The business, located in Leeds' Clarence Dock and which houses Martin's 54-cover Leeds Kitchen and Bhatia's 90-cover Bird by Vineet restaurants alongside banqueting suites and conference rooms, closed unexpectedly on Monday after just over four years in operation.
LCI, which also withdrew its bid for a large casino licence, said it had been hit by the Government's failure to make changes to gambling regulations and the council's request for more investment in order to score the new licence.
Roy Ramm, governance and public affairs director at LCI said: “We work really hard to provide safe, adult leisure and entertainment venues and real careers for the people who work for us, but Government policy towards the industry does not seem to acknowledge those efforts or recognise or promote the industry as a safe and legitimate element of the leisure and tourism sector, providing jobs and investment in the UK.
“We made a significant investment into Alea when it opened in 2008 and have continued to support the business through difficult times for Clarence Dock, but during the bid process we became aware of the full extent of the additional investment sought by the council in order to win the new licence and it has become clear to us that this additional financial burden is unsustainable."
In December, venue director Charles Merchie told BigHospitality how re-positioning the venue as an entertainment hub rather than simply a casino had helped keep the business going.
However, the business, which is thought to have also been affected by lack of visitors to the Clarence Dock area, was not able to continue without the casino.
A statement on the Leeds Kitchen website said: "Unfortunately the Leeds Alea Casino, owned by London Clubs International has suspended trading as of 4th March 2013. As a consequence, the Leeds Kitchen, although a successful addition to the overall Alea Leeds offering cannot operate as a standalone restaurant within this development.
"We would like to thank our customers, staff and suppliers for making Leeds Kitchen an award winning restaurant."
It is not known if the restaurants will re-locate following the closure.
A statement from LCI said a redundancy consultation is now underway with Alea Leeds' 99 members of staff.