Mecca Bingo owner Rank Group (LON: RNK) reported pre-tax losses of £107.1 million for the six months to December 31st. This was a sharp reversal from the profits of £101.5 million reported in the same period last year.
The Rank Group, which owns the Grosvenor Casinos and the Mecca Bingo venues, blamed the cost of living crisis for putting the squeeze on its customers.
In the first half of the year, the Rank Group (LON:RNK) like-for-like underlying earnings plunged to £4.2 million from £24.9 million in the same period a year earlier. Hitting profits was £15 million of extra costs from energy bills and staff wage hikes.
Rank Group CEO John O’Reilly said:
“The recovery from the severe impact of the pandemic on our UK venues businesses, Grosvenor and Mecca, has certainly been slower than we anticipated.”
“Since lockdown we have faced a huge increase in energy costs, high wage inflation, the slow return of overseas visitors to London and the increasing pressure on consumers’ discretionary income.
“We experienced strong trading over the Christmas and New Year holiday period, but recognise that the trading environment is likely to be challenging in the months ahead and cost pressures will continue to weigh heavily on the UK hospitality sector.”
Foot Fault Up But Spending Down
There were some positives from the results, Rank Group (LON: RNK) spoke of a rebound over the Christmas period. The UK bingo and casino operator said the bounce continued into January. Grosvenor Casinos saw revenues rebound by 19% between December 24 and January 2 and up by 20% so far in January altogether.
Another positive for Rank was in both its Grosvenor Casinos and its Mecca Bingos, the number of visitors actually increased. Grosvenor saw customer visits increase by 5% in the six months to 31 December 2022, Meanwhile, in the same period, Mecca Bingo visitors increased by 4%.
However, despite increases in the number of visitors, spending was down. Grosvenor Casinos saw a 9% decrease in spending, whilst Mecca saw even less spending, down 20% from the same period last year.
Affordability Checks Impacting Gambling Operators
The Rank Group, which also owns the Enracha gambling brand in Spain, pointed towards the tougher affordability restrictions put forward by a Government white paper last year. This suggested gamblers should be checked after incurring a certain loss over a certain period of time (i.e. £125 in a month).
“We have also experienced a continued tightening of the regulatory environment, particularly in regards to affordability restrictions on customers.” CEO O'Reilly said.
The triggers to start the checks differentiate between the various gambling operators, including bookmakers and casinos. O'Reilly called for the Government to publish the highly anticipated White Paper “sooner rather than later.” He said:
“Casino and bingo venues are in need of long-overdue modernisation of outdated regulation which heavily restricts the customer proposition.
“This appears to be widely recognised within the debate surrounding the Government’s review and we are hopeful of a positive policy outcome followed by the much-needed rapid implementation of new regulation.”
What's Next for Rank and Mecca Bingo?
Just one year after celebrating its 60th anniversary, the road ahead looks a challenging one for the bingo chain.
After confirming the closure of several popular bingo venues in the last week, including Mecca Bingo Doncaster and Mecca Bingo Hull Cecil, there could well be more closures imminent. Already, the future of Mecca Bingo Hayes and Hillingdon and Mecca Bingo Leeds are the subject of discussion.
O'Reilly pointed towards the possibility of falling wholesale energy prices, providing optimism for the consumer spending outlook.
He said: “It’s going to be tough, but I’m hoping for better times ahead – and not too far ahead.”
One thing that has become apparent from the latest Rank Group (LON: RNK) results is that people are going to the Mecca bingo halls and Grosvenor Casinos but just spending less. Ok, foot fault levels are still behind the pre-pandemic levels of 2019, but the increase in numbers should give hope. The British public loves their bingo, and despite the challenges and closures of the last few years, there is a captive and growing audience for retail bingo in the UK.
It hasn't just been Mecca Bingo venues closing, Buzz Bingo Slough's future looks uncertain, as does Buzz Bingo Scunthorpe. After the mass closures during the pandemic, the number of bingo halls has more than halved in the last few years.
Could Mecca Bingo and Others Be Doing More?
“The bingo industry continues to miss a trick by not adapting their venues to multi-purpose spaces to massively increase revenue in difficult times.”
“Moveable tables and chairs is all you need and you open yourself up to so many different events. Madness,” he commented.
After Mecca Bingo launched the flagship Luton venue around a year ago, the UK bingo operator should look at what it does with its venues rather than sell them off.
Ben has been an massive bingo enthusiast and fan since playing at the seaside as a kid. Dedicated to bringing you the latest and best bingo news from the UK